Understanding Qualcomm Annual Report’s Technology Concepts

I’ve been compiling a list of companies that produce products / services which I can’t live without (you can read here why that’s important: http://qr.ae/dmUby).

One of these companies is Qualcomm, the world’s largest smartphone semi-conductor.

But going through the 2014 annual report was not an easy read, causing intense confusion for a non-Electrical Engineering background reader like me within the first few paragraphs.

So here are my notes of what I learned about the encountered technology concepts I didn’t understand. The objective is to know enough about the concepts to understand the annual report, so any extreme technical specifics I will link to other websites to explain.

All the technology concepts you need to grasp before fully understanding the 2014 Qualcomm annual report is concentrated in “Item 1. Business”

“Item 1. Business” Technology Concepts

Understanding the following sentence makes the “Overview” of “Item 1. Business” much easier to understand:

“Based on wireless connections, CDMA and TDMA (Time Division Multiple Access), of which GSM (Global System for Mobile Communications) is the primary commercial form, are the primary digital technologies currently used to transmit a wireless device user’s voice or data over radio waves using a public cellular wireless network. “

The key to understanding this sentence are the three terms I’ve highlighted, namely CDMA, TDMA and GSM.

In this sentence, Qualcomm is saying that the key technologies used for what we understand conventionally as our 2G and 3G capabilities for our smartphones are CDMA and TDMA.

For 2G technology, the dominant standard is GSM with over 90% market share. GSM is based on the TDMA technology. This explains why Qualcomm says “TDMA… of which GSM… is the primary commercial form”.

For the remaining <10% market share, another technology that is used is CDMA (Code Division Multiple Access), which Qualcomm has “significant patents, patent applications and trade secrets” on. Qualcomm invented CDMA, so anyone who uses CDMA has to pay Qualcomm patent license.

The reason why CDMA and TDMA “are the primary digital technologies currently used to transmit a wireless device user’s voice or data over radio waves using a public cellular wireless network” is because despite advances in 3G and 4G technologies, most of the world is still using 2G technology: screen-shot-2014-02-05-at-5-37-00-pm(Clicking the image will bring you to the source I borrowed the picture from)

So if Qualcomm literally owns CDMA technology, and it makes up <10% of 2G market share compared to GSM, doesn’t that make Qualcomm not great? Well fortunately for Qualcomm, the dominant standard for 3G technology is the UMTS (Universal Mobile Telecommunications System), which is based on the W-CDMA technology (another extension of CDMA technology). And as you can see from the graph above, many people are using 3G and the numbers will keep picking up.

Another key part of Qualcomm’s strength is in the following sentence:

We also continue our significant role in the development and commercialization of OFDMA (Orthogonal Frequency Division Multiple Access) technology for which we own substantial intellectual property.

OFDMA is the technology used for LTE technology, which is always marketed as 4G LTE technology. Technically speaking 4G and LTE are not the same, as a smartphone that uses LTE technology just means it is significantly better than 3G technology but not quite up to 4G technology standards yet. What’s important to note is that Qualcomm is also the dominant player for LTE technology as well, with a whopping 94% market share in 2013 alone. Mobile-LTE-baseband-market-shares(Clicking the image will bring you to the source I borrowed the picture from)

The rest of the “Overview” of “Item 1. Business” is straightforward, basically stating that Qualcomm also has products in the following areas:

[Disclaimer] Not advice. No offer. Do not rely. May lose value. Risky. Conflicts hidden/obscured. (Borrowed from Terrence Yang‘s Disclaimer on Quora)

If you find any of the technology concepts to be explained incorrectly, please feel free to point out so that I can rectify it. Thanks!

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