Nov 15, 2022 · 2h 27m · acquired
Qualcomm · Acquired
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Recorded live in Lisbon, Acquired hosts Ben Gilbert and David Rosenthal explore the comprehensive history, technological breakthroughs, and business model innovations that transformed Qualcomm into a global leader in wireless communications.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ben and David hold 98.8% of the talking time here. How this is scored →
Ben and David as informed peer 0.2 Guest teaching 0.2 Guest disagreement 0.0 Ben and David pushing back 0.0
speaking balance: gold is Ben and David, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 3:37 Ben Miller explains Fundrise direct retail model
This is a collaborative narrative show with no actual combativeness; the only guest appearance is Ben Miller's sponsor segment explaining retail investing.
Hardest push from Ben and David ▶ 1:52:50 Ben challenges Qualcomm's aggressive licensing fee modelBen breaks down how Qualcomm demanded percentage-based device royalties on top of modem chip costs, characterizing it as predatory value capture.
Biggest teaching moment ▶ 3:37 Ben Miller educates hosts on retail crowdfunding mechanicsFundrise CEO Ben Miller explains how they raised $155M directly from retail investors before opening the model to private tech companies.
Ben and David hold their own ▶ 18:15 Ben articulates Claude Shannon's Information TheoryBen explains the Shannon-Hartley theorem and theoretical limits of signal transmission across noisy mediums using a clear dinner party analogy.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ben and David as informed peer | Guest teaching | Guest disagreement | Ben and David pushing back | Why |
|---|---|---|---|---|---|---|
| The Invisible RF Spectrum and the Genesis of Qualcomm | 0 | 0 | 0 | 0 | Introductory monologue and narrative framing by the co-hosts at the live event in Lisbon. There is no guest present or pushback. | |
| Presenting Sponsor: Fundrise Innovation Fund | 3 | 3 | 0 | 0 | Sponsored segment featuring Fundrise CEO Ben Miller explaining how retail investment directly funded the company and their new Innovation Fund. The hosts ask friendly prompting questions with zero friction. | |
| Setting the Stage: The Qualcomm Equation and Edwin Land | 0 | 0 | 0 | 0 | Co-hosts set up the narrative arc referencing Dave Mock's book 'The Qualcomm Equation' and Edwin Land's philosophy of creative succession. | |
| Act One: Hedy Lamarr and the Invention of Spread Spectrum | 0 | 0 | 0 | 0 | Historical narrative segment detailing Hedy Lamarr and George Antheil's invention of frequency-hopping spread spectrum technology during WWII. | |
| Act Two: Claude Shannon and Information Theory | 0 | 0 | 0 | 0 | Co-hosts discuss Claude Shannon and the foundational principles of information theory, signal-to-noise ratios, and channel capacity. | |
| Act Three: Erwin Jacobs, Andrew Viterbi, and Founding Linkabit | 0 | 0 | 0 | 0 | Storytelling covering Erwin Jacobs' background from Cornell hotel management to MIT PhD, moving to UCSD, and founding Linkabit. | |
| Commercial Expansion of Linkabit and Acquisition by M/A-COM | 0 | 0 | 0 | 0 | Recounting Linkabit's commercial work for Walmart's satellite network, TV scrambling systems, and ultimate acquisition by M/A-COM. | |
| Founding Qualcomm and the Development of CDMA Technology | 0 | 0 | 0 | 0 | Narrative covering the founding of Qualcomm, the conception of CDMA over TDMA/FDMA, and patenting terrestrial CDMA applications. | |
| Commercializing OmniTRACS and Bootstrapping Cellular Ambitions | 0 | 0 | 0 | 0 | Detailing OmniTRACS commercialization, merging with OmniNet, and bootstrapping cellular CDMA development with cash flow. | |
| Sponsor: Brex Corporate Cards and Billboard Rewards | 0 | 0 | 0 | 0 | Ad read for Brex corporate cards followed by narrative on the wireless 'Holy Wars' and live field demonstrations of CDMA in San Diego and NYC. | |
| Qualcomm's Full-Stack JVs and Fabless Semiconductor Strategy | 0 | 0 | 0 | 0 | Explaining Qualcomm's joint ventures with Nortel and Sony, fabless manufacturing strategy with TSMC, and IPO. | |
| Divestitures, Business Model Restructuring, and the 2000 Dot-Com Run | 0 | 0 | 0 | 0 | Discussing the divestment of base station and handset manufacturing, transitioning to QCT chips and QTL licensing, and the 2,621% stock surge in 1999-2000. | |
| The Paul Jacobs Era, 4G OFDMA Shift, and Snapdragon Emergence | 0 | 0 | 0 | 0 | Narrative on Paul Jacobs taking over as CEO, the acquisition of Flarion for 4G OFDMA patents, and the emergence of Snapdragon. | |
| Antitrust Battles, Hostile Takeovers, and the Apple Legal Feud | 0 | 0 | 0 | 0 | Deep dive into hostile takeover attempts by Broadcom, FTC antitrust litigation, and the royalty fee battles with Apple. | |
| Nuvia Acquisition and Expansion into Automotive and RF Front-End | 0 | 0 | 0 | 0 | Analysis of the Nuvia acquisition, ARM architecture custom core design, and expansion into automotive and RF front-end modules. | |
| Sponsor: Pilot Financial & Accounting Services | 0 | 0 | 0 | 0 | Sponsor read for Pilot financial and accounting services. | |
| Financial Overview and Seven Powers Business Analysis | 0 | 0 | 0 | 0 | Financial review, valuation metrics, Seven Powers analysis (cornered resource patents, process power), and bull/bear takeaways. |
Statements from this episode (31)
Solana Co-Founder Anatoly Yakovenko Spent 10 Years at Qualcomm
“Especially given Solana's tie to Qualcomm with Anatoly having worked there for over 10 years.”
Hollywood Star Hedy Lamarr Co-Patented Spread Spectrum Technology in 1942
“They develop A concept that they patent, and they get issued a confidential patent that stays confidential for decades in the US military... It was issued in 1942, so four decades that this history was completely unknown. They develop a novel technique to defe…”
Claude Shannon's Postwar Paper Invented the Bit and Information Theory
“What he publishes after the war, his masterwork, A Mathematical Theory of Communication, which defines a bit, the new field of information theory, ushers in the digital era for the world.”
Qualcomm Founder Erwin Jacobs Co-Authored the First Digital Communications Textbook
“He and a fellow faculty member write the first textbook on digital communications that is still in use today. You can still, like, it is the bible of digital communication theory. You can buy it on Amazon.”
Linkabit Co-Founder Leonard Kleinrock Sent the First ARPANET Message
“Len and one of his grad students at the time at UCLA, like the next year, right after this has happened, this is all happening at the same time, they sent the first message on ARPANET ever, like the first Internet transmission ever from UCLA to Stanford.”
Satellite Software Development Is Constrained by Astronomical Patching Costs
“Any company in the sort of emerging space economy, it's a totally different engineering problem than you're used to today, because if you ship code up to your satellite and you find a bug, it's like very expensive and very slow to go get enough bandwidth and a…”
Linkabit's First Commercial Project Was Walmart's Satellite Network
“Linkovitz first project is doing the satellite communication system.
For Walmart.”
Qualcomm's Market Entry Strategically Rivals or Surpasses Nvidia's
“The business history of Qualcomm, just like Bill Gurley said on the blurb of this book, It is one of the most brilliant strategic executions of entering a market period. You know, like, writ large ever. Like, this is on par with NVIDIA, if not, honestly, more …”
Qualcomm's Founders Took 50% Dilution in 1988 to Fund OmniTRACS
“So everyone gets diluted 50%, By merging with the customer themselves in order to get just a few million dollars to continue funding this effort.”
Qualcomm's OmniTRACS Revenue Doubled Annually for Five Years
“The business doubles every year for like five years from a thirty two million dollar base.”
Hardware Success Requires Forecasting Moore's Law for the Ship Date
“There are so many things that we've talked about in the last, I mean, on Acquired generally, but especially in the last year, where their success came from correctly forecasting where Moore's Law would be at the time that they shipped their product.”
In 1980, McKinsey Forecasted Only 900,000 US Cellular Subscribers by 2000
“AT&T, who has been the incumbent for a hundred years on all things telecommunications, commissioned McKinsey and company to predict cell phone. David Rosenthal: It all goes back to McKinsey always. Ben Gilbert: Always. Ben Gilbert: To predict the cell phone us…”
US Cellular Network Subscribers Reached 109 Million in 2000
“There were one hundred and nine million people, not 900,000, hundred nine million subscribed in the year 2000.”
South Korea Once Accounted for Nearly 40% of Qualcomm's Revenue
“South Korea, for time was, I think, close to 40% of Qualcomm's revenues, because the whole country, like, and it was one of the, you know, most advanced mobile countries all just using Qualcomm.”
In 2022, Qualcomm Outranked Nvidia as the Largest Fabless Semiconductor Company
“Qualcomm today is the largest fabulous semiconductor company in the world... Bigger than NVIDIA.”
Semiconductors Generate 85% of Qualcomm's Total Annual Revenue
“Today, Qualcomm's total revenue is what, close to forty billion annually, I think? ... Of which 85% is their semiconductor business.”
Qualcomm Sold Its Mobile Phone Division to Kyocera in 1999
“December of 1999, Kyocera buys Qualcomm's mobile phone business, so they now officially just sell chips that they call QTC, the Qualcomm CDMA Technologies Group, and then they've got a second group, QTL, which is called Qualcomm Technology Licensing.”
Qualcomm Stock Gained 2,621% in a Single Year as Top Performer
“The single best performing stock for the entire year 2000 is Qualcomm. It appreciates, the Qualcomm stock appreciates, 2621% for the 366 days of the year, 2000?”
Qualcomm Earns Roughly $20 for Every Smartphone Sold Globally, Including iPhones
“And I, you know, to the point that I think today, Qualcomm makes on average about 20 dollars for every Smartphone sold in the world, including Apple iPhones.”
Broadcom Backed Its $117B Hostile Takeover of Qualcomm with $106B Debt
“In 2018, Broadcom comes in and tries to do a hostile takeover at a one hundred and seventeen billion dollar valuation. And interestingly, it was financed by one hundred and six billion dollars of debt.”
Blocking Broadcom's Qualcomm Takeover Was a Massive National Security Win
“This is one of the huge wins of the Trump administration you know, for like America was keeping Qualcomm an independent American company. Like whether it was Qualcomm calling in a favor or just what, like, I think we can all look back in 2022 and be like, this…”
Qualcomm Contractually Forced Apple to Vocally Condemn WiMAX Under Penalty
“Qualcomm asked Apple to speak out against WiMAX, which is a competing technology. They were like, we need you to vocally Speak out that our competitor is a bad piece of technology. They also stipulated that if Apple ever used a competing supplier and keep in m…”
Apple Paid Qualcomm $4.5B in 2019 for Six-Year Patent Licenses
“Apple also paid four billion, now switching over to the licensing side of the house to secure the patent licenses over the next six years. I think it was four and a half billion dollars for a six year deal.”
Qualcomm Acquired Nuvia, Founded by Apple's Chief A-Series Chip Architect
“Well, Nuvia was founded by former Apple Silicon people, including the chief architect of the A series chips.”
Qualcomm Is Developing a Direct Competitor to Apple's M-Series Chips
“They already make Snapdragons for the high-end Android phones, and soon they'll be able to make a competitor to Apple's M series chips for laptops and desktops and maybe even servers.”
Qualcomm Historically Failed When Straying Beyond Core Cellular Competencies
“Qualcomm historically has failed every time they've tried to do servers or watches or smart home or displays. Like, every time they've strayed too far from their core competency, it hasn't been good.”
Qualcomm's 2022 Market Cap Merely Matched Its Dot-Com Bubble Peak Valuation
“Qualcomm today has a one hundred and twenty billion dollar market cap, which, two things. One, that's astonishing. That's impressive. They're technological pioneers, and they're amazing at value capture. Two, that is the same price that it was worth at the pea…”
Qualcomm's Licensing Business Operates at a 69% Margin, Double Its Chips
“They do forty four billion in revenue. Chips make up most of that at thirty seven billion. Licensing fees make up only seven billion, but the licenses Are a much higher margin business. It's a 69% margin. I think it's earnings before tax margin on licensing ve…”
Qualcomm's Early Team Possessed Unreplicable Process Power Like Pixar's Braintrust
“I think Qualcomm during the golden years that we told the history of had real process power. I think it was equivalent to the Pixar brain trust. Like that set of people working together under those set of circumstances were wholly unique in the industry and th…”
MediaTek Surpassed Qualcomm in Total Semiconductor Unit Shipments
“MediaTek systems are way cheaper than Qualcomm. And I think they actually just surpassed Qualcomm in terms of number of units shipped.”
Qualcomm's Best Days Are Behind It If It Remains Only Handsets
“I think if they continue to try to run the same playbook in just the handset market that they have been, the best days are behind them because people have caught onto their games a little bit and are gonna, gonna squeeze them from a bunch of different directio…”