Qualcomm, Inc.: Smart Moves

A talent for partnerships in both established and rapidly growing markets for smarter devices characterizes this California communications technology company.

San Diego-based Qualcomm Inc. seems to have a talent for collaboration that is only appropriate for a company whose business is built on facilitating communications. Over the past year, the partnerships have been coming in a fast and furious fashion and adding to an already impressive number of big footprints in fast-growing industries for this 2007 IW 50 Best Manufacturer.

This past summer, Qualcomm unveiled a partnership with portable device manufacturer Ubixon Co. to integrate a new type of micro-electro-mechanical system-based (MEMS) display, developed in the Qualcomm R&D labs, into Ubixon's Bluetooth stereo headset products. Based on the same natural phenomenon that makes a butterfly's wings shimmer, this new technology gives users a display that requires no backlighting, making it visible even in bright sunlight while markedly reducing power consumption.

Late last month, the company announced an extension of this innovative, MEMS-based display technology that should satisfy two converging handheld device market trends by enabling fast, high-quality video playback while still extending battery life.

Continuing its strong market position in mobile technology, in early November, the company announced a partnership with Canadian telecom Telus to launch a new user interface that is based on Qualcomm's uiOne system. Telus can now offer its customers a quick, customizable data portal, which is a crucial competitive differentiator in the convenience-oriented consumer mobile marketplace. Just as importantly, Telus can brand that redesigned and upgraded portal, which is just as crucial and is something that Qualcomm, which paid millions for naming rights to San Diego's football stadium (a property that earned the company untold amounts of media exposure and goodwill as it served as a shelter during the recent Southern California wildfires) knows all too well.

Staying in the sports arena, early this month Qualcomm announced a partnership with the interactive media and Internet company of Major League Baseball for development and delivery of a mobile-friendly site offering content and services for baseball fans.

Qualcomm, Inc.
At A Glance

Qualcomm Inc.
San Diego, Calif.
Primary Industry: Medical Instruments and Equipment
Number of Employees: 11,200
2006 In Review
Revenue: $7.52 billion
Profit Margin: 32.82%
Sales Turnover: 0.49
Inventory Turnover: 1.12
Revenue Growth: 32.66%
Return On Assets: 19.79%
Return On Equity: 22.21%

In another big-name partnership, Qualcomm was also one of the heavy hitters joining up with Google, T-Mobile, HTC, Motorola and others to launch the Open Handset Alliance earlier this month. Many analysts have pointed to this multinational alliance of technology and mobile industry leaders as heralding the future of the mobile phone market, which is currently more than 3 billion users strong and is poised for significant growth in years to come.

Finally, when the company sees a market that has potential beyond the partnership level, it isn't afraid to step in and play the mergers and acquisitions game. In a move of special interest to manufacturers, back in late 2006 the company expanded its already strong position in mobile asset tracking into the fixed asset monitoring market with the acquisition of machine-to-machine solutions provider nPhase. This acquisition carves Qualcomm a slice of the rapidly developing manufacturing market category known as "smart services," which allows OEMs of everything from jet engines to photocopiers to connect equipment to the Internet and monitor its on-site performance remotely in real time. Such "remote product service" capability is a boon to manufacturers suffering from declining margins as it allows them to add significant service value to their products, and correspondingly significant service revenue to their income statements.


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