 Hey, this is Josh from The Verge, and we're here with Dr. Paul E. Jacobs, the chairman and CEO of Qualcomm, and we're going to talk a little bit about what they're working on right now, a little bit of history, and just see what the future holds. So Paul, thanks for taking the time. Thanks for having me. So Qualcomm was founded in 1985, right, by your father. That's right. My father and a few other people, and they'd worked at a previous company called Linkabit. And the really cool thing was Linkabit used digital communications theory for really expensive stuff, like military and space applications. But then Moore's Law came along and made it cheaper. So Qualcomm, even though they didn't think about it at the time, really was all about taking that really complicated technology and putting it in consumer and commercial applications. So our first thing was satellite messaging to trucks. You can imagine that. They had little antennas. So like 18-wheelers? Exactly. They had little satellite antennas that tracked where the satellite was, and that's how you did messaging. Interesting. And then we came on the cellular system, you know, CDMA technology a little bit later. But it was the same kind of thing. How do you take this really complex technology and stick it in something that people can carry around with them that's cheap enough? Right. But Qualcomm hasn't been a real household name until pretty recently. I mean, people have known, I think Qualcomm's been in, you know, people know the company. They know that you're involved in devices they use. But in the last few years, there's been a real explosion in mobile, and you guys were there. Obviously, you're there on the kind of ground, literally on the ground floor of that. Yeah. And, well, not literally, but you're there very early. Yeah. How has that changed how you do what you do? I mean, has it changed at all in the sense that you're now consumer facing, you're making products? Snapdragon has become a kind of household name when it comes to mobile devices. Has that changed the rate of innovation that you feel like you need to have? Has it changed your pace? Yeah, I don't think so. I mean, we really had been trying to drive the wireless internet for a really long time. In the very early days of CDMA, we actually put the internet protocols inside the phone. Now, people didn't know it was in there because it looked like it was one of those Haze modems, the ATDT, blah, blah, blah, and made all the noises and stuff. Right. But we actually had the internet inside it. And so, in the end, we put a browser on the front end and just connected in the internet on the back end. And we ended up with internet on cell phones. So we've been doing that since really the early 90s. And now, what's cool is because smartphones are so popular, now there's other ways that we can innovate. So we used to innovate a lot about the radio technology. We still do a lot of that because there's so much data demand. But now we're innovating on the CPU, the microprocessor technology, the graphics technology, Wi-Fi and Bluetooth connectivity technology, just all these different areas where we can add like extra functionality into the device. And now we're actually going up another level. So we've been doing augmented reality, for example, so kind of platforms of technology, still enabling other people to build their stuff on top of our stuff. But it's kind of another layer up, if you think of it. How are you integrating that with, I mean, you guys are doing, like you're talking about radio technology and processor technology. How is augmented reality a piece of that? I mean, is that a software layer? Is that an actual hardware layer? Or is that? That's an interesting question because there's some software, obviously, and there's a developer's kit for the developers to use it. But then to actually make it work well, it integrates into a lot of things, like sensors in the phone, whether it's the camera or the accelerometer. It makes us have to make the graphics processor work really fast so that when you move the phone around and the image on the screen changes, you've got to change exactly how that 3D object that you're compositing in there changes, too. So you're basically creating this almost off-the-rack combination of things. You can say, if you're doing augmented reality, we've got the combo of things you need to make it really work in a device. Exactly. That's pretty cool. And then we try and optimize it. We say, yeah, and it's going to work better on a Snapdragon chip, even though you'll get it to work on other devices because we want to cover all the different platforms. The developers really want you to cover the whole landscape. Yeah, they don't want to be locked in somewhere, which makes sense. So speaking on mobile devices, you guys really have a lot more consumer-facing stuff now than you've ever had, I think. So you've got Snapdragon in mobile phones and in tablets. The pace of that is insane. You guys are every... It feels like every few weeks there's a new Snapdragon. You hear of a new model number, and it's faster, and it's smaller. Do you feel a lot of pressure from the competition? You guys aren't the only people doing ARM SoCs, right? So it seems like there's an immense amount of pressure from other companies because you'll see this... It seems like the same phone with a different chip on it. How much of that is spurring innovation? How much of that is making you guys think faster? There's definitely a lot of pressure to innovate quickly, and we have a lot of products lined up in parallel so that they can come out that quickly because obviously we don't do them in that short of a period of time. So there is a lot of pressure to drive technology forward, but I think we've always felt that way, because we always felt, even from the very beginning, that in the end the phone was gonna be the computing and entertainment platform for everybody. And so to get from where we were, which used to be text-based phones and really cruddy screens and stuff like that, to where we are today, there was a long way to go. So we've been pushing ourselves pretty hard for a long time. And I do agree that there's definitely more competition, and there's probably competition that's gonna come from the likes of an Intel from above and some of the other guys from below. Intel is coming, right? Exactly. I mean, they're coming from mobile, so you guys are gonna have to compete with them. But are the incremental changes that we see, are they happening because, Alan, I'm gonna maybe challenge you a little bit here, are they happening because the industry wants to just see a new chipset every so often? Or is there real innovation happening in those iterations, in those small iterations of these sets? No. There's definitely new stuff going on. I mean, we completely changed the architecture of our microprocessor from the last generation of chips to this generation, because people want stuff to happen really fast. I mean, you care that when you touch the screen, stuff animates quickly, and things like augmented reality take a lot of computation and voice recognition, all these different ways of interfacing with the phone, take a lot of compute capability. And so we are innovating there. When you look at the radio technology, I mean, we're going from 3G to 4G to a completely different kind of signaling technology. I don't want to get into all the details of it, but it is fundamentally different. And then you've got to make those things all work backward and forward compatible. And then you say, okay, well, from there, what do you do next? Because we're planning for a thousand times increase in data demand over the next few years. And we're going to do some pretty serious innovation to make that work. Right. So you feel that these aren't baby steps. These are real. You're taking real steps every time. We spent $3 billion in R&D last year. $3 billion? Yeah. In one year. It's not going to change. Yeah. And it's mostly focused on how do we drive all these different vectors, whether it's the radio or the computer, the graphics or the connectivity. How do we drive that stuff faster and faster? Right. So I want to talk about 2012 and what you guys have planned for the future. I mean, mobile, everybody knows you as, hey, you're doing Snapdragon. You're doing mobile stuff. Right. You're going other places, too. Now that Windows 8 is, there's an ARM version of Windows 8, this changes your place in the industry a little bit in the sense that you have not been the company that's making chips for laptops and for devices that are Windows devices. Right. This is a big deal for you. I mean, are you looking at this as a big opportunity? Yeah. No, I think it's going to be really cool. And I think people are going to be amazed by the kind of form factors that they get when you use a mobile chip, but you use it for a full computing environment. And so we're going to see really thin, light devices. I think it's going to be pretty cool. So we're really excited about it. And we're working with a lot of companies, not just our traditional phone companies, but the traditional PC manufacturers are really interested in this, too, because they get it. I mean, everybody wants to be connected all the time. You want to have your device always synchronizing your email and your calendar and your Facebook and all that stuff that you come to depend on. And the funny thing, too, that I always found was when you have it with you, you're sort of less tolerant of delay. You don't want to wait, open the thing up, have it boot up, have it then synchronized. You just want to touch it and have it work. And obviously, the iPad's a great example of that. I mean, it became so popular because it did provide that. This is going to provide that plus Office and all that computing environment. The impression I get from Microsoft, and I'm sure you're getting a similar impression, and you guys are probably, I mean, you're not probably, you're definitely working on this stuff. We're going to see devices, you tell me if I'm wrong, that act like a tablet, do everything that a tablet does. It's kind of a touch optimized, not just Windows with touch, but a completely touch optimized experience. But then you go home, you dock it somewhere, and suddenly you've got a full featured laptop. That is really kind of the future of those devices. And you guys are going to be there making the chips for those devices. Yeah, I mean, we're absolutely investing heavily to make sure that we have a lot of compute power but focus on power consumption. So it isn't a thing that just runs out of juice right away. It isn't a thing that needs a fan to cool it off and that kind of stuff. That to me is what's really important. Take the way that we made smartphones, make them so easy to use and simple and light and always on and bring that to the full computing environment. And by the way, Microsoft's done a great job on that. We did this demo with them at their build conference, their developers conference, of connected standby mode. So people are thinking, OK, is Microsoft going to be able to lower the power consumption of Windows so that it can act like a smartphone? But they did. And we showed it off, and it's cool. When you stop using the thing, the power consumption goes way down. It goes into kind of a hibernating state. But it wakes up every so often to synchronize. And when you touch the screen, boom, everything comes back on. That's going to change the way people use our computer, I think. So we talked about Intel before, but this really puts you in a big way into competition with Intel in a place where you've never been in competition with them. They're coming into mobile, doing mobile chips now. You guys are going the opposite direction here. You're going to start doing laptop systems. So that's a shift for you. You're competing in a space. You're competing with a lot of big players in a new space. When you've been competing with big players in the mobile space, does that change the way your business looks? Does that change the business model? Or is Qualcomm a different company after Windows 8 than it was before? For those customers that have a certain way of working, we will adapt to their way of working, meaning that Intel had provided certain technologies and sort of reference designs and products and so forth to those manufacturers. And if that's the way they want to work with us, we'll adapt to that. One of the things I think we've done pretty well is go to different kinds of companies in various industries. You take in the very beginning Samsung and LG were consumer electronics companies. We worked with them to become big telecom companies. You go to China and you have ZTE and Huawei. They really weren't consumer electronics companies, but we figured a way to work with them. Now we're working with a lot of companies that are like these real small companies that have a distribution channel or they have some manufacturing. We give them almost a complete phone design, so we've learned how to work with them. I just think it's an evolution of how do you manage the relationship with the customer? How do you get them up to speed? And then also for us to work with them whatever way is comfortable for them. Another way you're adapting is, we said you're more consumer facing now, but you're doing smart TV stuff, you're doing connected homework. Can you tell me a little about where you see that going and where you see Qualcomm being involved in that? Yes, it's kind of an evolution of the vision of what the phone should do. For a long time we've been working on the idea that the phone was going to be the center where all of this stuff came in and you did your entertainment and computing and stuff on the phone. Now we put so much effort into the phone and those chips are so capable that they can actually power purpose built devices. We see them going out into consumer electronics devices, into things like TVs, into game consoles, into printers and access points, all these different things that you might have in the house. And then you say, okay, well what's the phone's role in that? Well we look at it as a phone will sit in the center, it will kind of sense that you have opportunities to interact with things around you. Maybe there's content you can download or a screen I can use or a speaker I can use or things like that. So it will sense that and it will be my remote control too so I can actually interface with those things. Turn the lights on and off, turn the screens on and off and so forth. Is this the internet of everything? Is that what you guys are calling it? Yeah, exactly. This is everything is talking to everything else. Everything and it's not always wireless. Lamps? Lamps definitely. Books? Well books, I mean we're really into that because we have this display. You're talking about e-books, right? Yeah. Not like physical books. A paper book? Well okay, so a paper book, we're doing stuff with augmented reality so you open up a paper book and you point your phone or your tablet at it and stuff comes out. Take like a physics textbook. It's just bizarre that there's little diagrams in a physics textbook when we all have computers you could just point your thing at it and actually have the experiment run in real time for you. Right, although the textbook may be going away, right? One hopes. It isn't what's really going to happen. One hopes. You're just going to open up your iPad or your Windows 8 tablet or something and you're going to look at it and you're going to be able to manipulate it there. I mean one hopes. We'll see how fast that happens. But I mean, but you see, you think that we're getting to a point now where the standards are coming together so that we can actually do connected homes in the right way? You know, have your phone be the center of that? I think probably we're going to get a few different silos of things. Hopefully it all comes together. I mean if you look on the like application side, at least we're getting things like HTML5 that work across a bunch of platforms. We're trying to do a thing that works across a bunch of operating systems, but there may be an Apple version, a Google version, a Microsoft version and so on and so forth. And you know, we'll see how that works out. And obviously the wireless operators and the cable companies, they'll all have a say in this too because they got stuff in their house. Yeah, that's going to be a lot of fun. Yeah, so I think this stuff's going to shake out for a few years yet. So you guys are doing this Tri-Quarter, this XPrize Tri-Quarter thing. Can you tell me what that is and what the thinking behind it is? So we've been really focused on mobile health and like how do you make it cheaper, simpler, more consumer friendly. So the idea with this thing is that there's going to be teams that are going to compete to build a thing like the Tri-Quarter which can actually diagnose diseases hopefully better than a doctor might even do it and do it not just for developed countries, but you can imagine it for emerging markets as well where they don't have as much of a developed healthcare system. So the idea is that people will come up with sensors, they'll come up with a device, there'll be some artificial intelligence associated with it to help do the diagnosis and we're going to see how close we can get to that vision that Star Trek had of waving this thing over you. I mean you actually imagine doing one of these, kind of a scan of somebody and getting that kind of information back on the device. So there's the question of how invasive of a thing is it? Does it take spit? Does it take blood? Some of that stuff would be pretty invasive I think. Okay but it's actually not that far fetched because there are guys right now working on sensors that would actually get embedded in your body and as an example they can find certain cells that start circulating in your body 24 hours or more before you have a heart attack. So the notion is that you have a sensor that's actually lodged in the vein in your wrist that's watching for that DNA coming by. Now if you imagine the phone acting as the Tri-Quarter all it's doing is interrogating that sensor that's already inside your body. And if you think that's weird by the way. Use of the word interrogating is always, you know the sensor inside your body is being interrogated. Sorry, talking to. Interfacing. I mean I think that's kind of an incredible idea but I mean it's exciting that you're trying to push that forward. I mean sure there could be abuses of that sort of thing very easily but I mean when you think about the kind of healthcare problems that we have not just here in America but around the world that could be a tool that would save a lot of lives. And I mean we're really focused on how do you use the technology for the good of mankind. I mean it honestly is the biggest technology platform that humanity has created. I mean wireless systems are six billion subscriptions so almost everybody has access to these systems and it gives you a huge opportunity but it also feels like a big responsibility like what are we going to do as an industry to use this technology and improve people's quality of life and standard of living. And this seems like a really obvious one because we all know countries are going bankrupt trying to support their healthcare systems. We got to make them more productive, more cost effective. We got to get this technology and really focus it in on these kinds of problems. Now it's obviously going to be a long road. It's hard to get things into the healthcare system. There's a lot of issues about safety when you talk about things that might even be inside your body. There's going to be a lot of work that goes between here and there but if we don't get it kicked off it never happens. This is an idea to focus attention, get a lot of teams from around the world focusing in on it over the next three years. We'll have a bunch of different sub-competitions and hopefully we come up with something that's like the tricorder at the end. That would be really amazing. I know you have to run. I have one final question. You guys stand right at the forefront of innovation in terms of our industry. What is going to be the sea change? We saw the iPhone and the iPad explode and they became that moment of change for the industry. What's the next thing? Is it motion? Is it voice? Is it something? Is it the connected home? Where is the next big wave coming from? Where do you see it happening? I think it is wireless as an enabling technology to these other things. It is this notion that you'll have the phone as a digital sixth sense. It'll tell you what's around you and you'll be able to interact with those things. To deal with this thousand X increase in data demand that we see, we're going to have to do stuff like not just new radio technologies in the wide area but also peer-to-peer technology. I think devices are all going to be talking to each other. We're starting to see some of that stuff happen now. If I walk into a room and on an ad hoc basis I can light up the screen there and take control of the speakers. Or I get in my car and my car says to my phone, hey, these are the buttons I have, these are the screens I have, these are the speakers I have. The phone says, this is the content I have and this is the map I have. These things just all talk to each other. I think that will be a really cool world and it will make things happen in a much simpler way than they happen today. That sounds magical. It will be cool. I really hope that that happens. We're trying. Paul, thank you so much. Thanks a lot, Jack. Thanks for having me.