Qualcomm learning how to incubate new technologies
Qualcomm has a big, well-funded research and development operation, but its program for commercializing new innovations is still a learning experience for the wireless chip maker.
Qualcomm Labs was set up about two and a half years ago to explore ways to bring new technologies into the world. Despite its name, the division isn’t where Qualcomm actually does its core research and development, an effort that commanded nearly US$1 billion of investment in fiscal 2012, about 20 percent of the company’s revenue. Instead, Qualcomm Labs is an incubator for ideas that might lead to more revenue in the future.
At a media event on Friday in San Francisco, company executives talked about a handful of technologies that Qualcomm Labs has helped along. One, LTE broadcast, is designed to make better use of mobile operators’ spectrum and improve streaming media performance. Another, called Gimbal, creates a “digital sixth sense” to give mobile applications greater contextual awareness.
Such are examples of technologies that could eventually benefit Qualcomm, either directly through licensing or indirectly by boosting sales of the company’s chips. The Labs unit looks for innovations that might create new revenue streams for Qualcomm, open up new mobile markets or make the company’s chips “stickier” with useful, chip-intensive features. Qualcomm Labs may use each technology to form a new division, roll it back into an existing one or sell off the technology.
“We’ve done maybe a dozen projects over the past two and a half years,” said Liz Gasser, vice president of business operations at Qualcomm Labs. “We’ve shut down a third of them. A third of them have spun out, and third of them are still going and live,” she said.
One early success at Qualcomm Labs was 2Net, a service for transmitting health information. The 2Net ecosystem includes devices that collect health data, gateways that send that data to cellular networks and a protected Qualcomm data center that processes the data and sends it to caregivers, said Peggy Johnson, Qualcomm’s president of global market development.
Johnson is an executive vice president of the company and has worked at Qualcomm for more than 20 years. Qualcomm Labs helped the mobile health initiative make the leap into the real world, where it’s now commercially available, she said. “We’ve been talking about wireless health for a decade. It wasn’t really moving very fast,” Johnson said.
Likewise, Gimbal gave Qualcomm a way to make more use of numerous sensors it had developed for mobile devices, she said. Gimbal now has an SDK for Android and iOS that lets developers enrich their apps by using components such as cameras and location sensors. For example, a promotional app for the next Star Trek movie lets fans earn points by pointing their cameras at posters for the movie, and when they walk by a theater that will be showing the movie on opening day, they will get offers to buy advance tickets.
If 2Net and Gimbal are examples of how Qualcomm Labs can turn a new idea into a business opportunity, that formula wasn’t obvious from the beginning. At first, Labs focused on mobile apps and services aimed directly at consumers, but that turned out to be the wrong path, Gasser said.
“If you can create interest at a consumer level, you can drive demand and pull through interesting technologies. That’s fine,” Gasser said. “That’s not us. That’s actually not who we are as a company.”
Qualcomm Labs then pivoted to focusing on platforms and underlying software for technologies that can push more mobile use, such as machine-to-machine networking, connected homes and the health and “sixth sense” systems the company talked about on Friday.
If Qualcomm advances those technologies right, they could drive massive sales of connected devices and higher mobile processing requirements that Qualcomm can then fulfill, Gasser said.
Still, it’s too soon to say whether Qualcomm Labs has had a major impact on Qualcomm’s course as a company, Gasser conceded.
“I don’t think we’re far enough to call success or otherwise at this point in time,” Gasser said.