A drab office building can be beautiful as it gleams in the morning sun, and the twelve-story, blue and gray Qualcomm chip design center is a prime example. Not among the main group of Qualcomm buildings around the headquarters, this one is a few blocks off on its own, easily towering over the vicinity, much as its company looms over San Diego. Qualcomm has been the pre-eminent force behind the changing texture of the city over the past decade, bringing in a flood of money and a small army of upper-middle class workers. Yet how many fellow residents really have any idea what goes on inside those walls, and what the daily routine is like? Let's step inside and have a look.
At this time in the morning there are still plenty of spaces in the parking garage. Thanks to flexible hours, there's no morning or evening rush of workers, but a steady trickle. By eleven the structure will be nearly full, and by eight in the evening it will be empty again. Don't expect to be too impressed, the cars in this garage are of the mid-range Honda type, with a few BMW's and even some Porsches. To be really wowed with the automotive selection, try the parking garage at the headquarters.
The entrance from the parking bridge is on the second floor. A large foyer is there for the elevators, across from the fitness center, which from this perspective is a door in a blank wall. The building interior is neat and retains a sense of newness, since this place only opened in 2006, with the intent of bringing the entire chip division under one roof. But space is already running out, there is spill-over to neighboring buildings and some of the break rooms have been converted into small cubicle farms. Yet upstairs, heading to the office there's almost no one to pass. The halls have a museum quality of quiet and stillness, only sometimes cut with a distant loud conversation or the dinging of the elevators. The building may contain hundreds of people, but most remain quietly in their offices or in the conference rooms, leaving large sections seemingly abandoned. But a strong sense of loneliness while surrounded by people a few feet away, yet out of sight, is a fact of modern life.
The floors on most Qualcomm buildings follow a common plan based on large central hallways connected to smaller hallways containing the offices. Those smaller halls have offices on each side, turn twice and return to the central hall. There are some variations, but the U-shape is the most common. At the base of each U is an open area with a desk that sometimes contains a secretary or admin assistant, sometimes seats an intern, or sometimes is dark and empty. Each grouping of offices could function as an independent suite, but the occupants are generally doing unrelated work. The assistants have a store room behind the desk where they keep supplies, such as cases of beer for the celebratory buffet when a project finishes.
As for the offices, they are quite generous by today's corporate standards. Engineers in the industry can spend decades in cubicles, only meriting an office upon breaking through to upper management. Not that there's anything necessarily wrong with cubicles. I've seen impressively large cubicles at some companies with thick and high walls, equivalent to an office except for the absence of a door and the constant presence of background noise. At Qualcomm there are some cubicles for interns and technicians, but most employees are in offices.
There is, of course, a hierarchy to the offices corresponding to the corporate ladder. Newly hired graduates and employees with positions low on the totem pole share internal (non-window) offices. With a little more seniority, they can move to individual internal offices. A promotion after that brings eligibility for a window, and the peak, only for the top of the pyramid, is a corner window office. The corner offices are about twice the size of the others, with room to hold a little round conference table at the front near the door and a desk in the back at the window. The cutoff point for each level depends on the specifics of the building and the group within it. After being in a window office for several years, I moved between buildings and found I didn't qualify for one in the new place. Since then I've received another promotion that should place me perpetually above the cut-off, but you never know.
Given Qualcomm's location, the window offices aren't trivial or just bragging fodder. This isn't Motorola headquarters, where the windows reveal a drab, developed Chicago suburb. Nor do we share TRW's view of the worn concrete roads and parking lots of in-land Redondo Beach. Many Qualcomm offices face the canyons to the north of Sorrento Valley, showing rolling hills lit up in in the perpetual San Diego sunshine. Those on the upper floors have a particularly spectacular view. If I had one of those offices I'd probably rather spend my time there than home. There's always something better, though. When visiting the Austin branch, where Qualcomm leases a couple of upper floors in a tall office building, I found someone in a corner window office with a panoramic view of the downtown. We both agreed this was the best office in the company, which is saying a lot given the wide array of buildings.
Qualcomm's numerous buildings within San Diego have letter designations, and before the number grew too large, the letters had meanings. "A" is the unassuming office building nestled into Sorrento Valley Road where Qualcomm started. "O" is the center for OmniTracs operations, and "M" is for OmniTracs equipment manufacturing. "Q" served as the company headquarters for a while, was lost to Ericcsson, and is now back with Qualcomm. That's the sprawling, geometric building with the multicolored roof visible in the distance when coming off the I-805 onto Mira Mesa Boulevard, which started out as a mall for interior decorators before Qualcomm took it over. There are other locations with meaningful letters, but by the late 1990's there were too many for the alphabet. Some employees still try to make unofficial sense of the designations.
One building that Qualcomm put up from scratch around 1997 to house the cellular phone division (later sold to Kyocera) had the appellation "AA". Up to that point projects were given internal names based on cartoon animals, such as "Pluto", "Dogbert", "Snoopy" and others. But in a rare show of engineering humor the project leads in AA began to name their projects after liquors, giving "sake" and "bourbon". Large corporations, of course, allow only the most innocuous of humor. Upper management soon got wind of this, sent an e-mail offering heartfelt apologies to those that may have been offended, and changed those names to "green tea" and "rocky road".
This division designs the integrated circuits, the chips, that make cellular phones work. Many locals remember the billboards selling Qualcomm phones: "Don't just buy American, buy San Diegan." And the phones were assembled at a few locations around Sorrento Valley and Mira Mesa, all as part of Qualcomm's plans to become one of the top cellular phone manufacturers in the American market. It didn't work. The division was a big money-loser and was sold off years ago to Kyocera. The company instead opted to take on a role similar to Intel with computers, that of making the chips and letting others who are more expert in consumer electronics put those chips into their phones. And Qualcomm went one step better than Intel by not even making the chips.
The chip division's role is to design and simulate the chips on computer and send the design to the silicon foundries for manufacturing. Real chips return a few weeks later for testing, and based on the measurements the engineers make revision in the design, send the new information to the foundry, and the process repeats. Eventually the part works to specification and can go out the door to the customers.
There's a never-ending push to reduce the number of these iterations, but they will probably never be completely eliminated. Their cycles dominate the thinking in the division, with the pre-eminent concern on everyone's mind being the "tape-out" date. Years ago the designers would send a magnetic tape roll with the design information to the foundry, hence the name. The transfer is done over the internet now, but the name stuck. If you walk the halls in the chip division, be prepared to hear about tape-outs early and often. I once heard an engineer refer to giving birth to her son as a tape-out, and I don't think she was entirely joking.
The chip division is actually a little outside of Qualcomm's mainstream, since it does create a physical product. Much of the rest of the company is devoted creating intellectual property. According to Qualcomm's 2006 annual report, $2.8 billion in revenue came from licensing and royalties. Qualcomm began as a technology research company, rather than a creator of consumer products, and there are some in the company that would like to return to that state. Around the year 2000, Qualcomm turned in an application to the Securities and Exchange Commission to spin off the chip division into an independent company. Preparations were made, including separating the internal websites, but then the market turned sour as the tech bubble burst. The one-year validity of the spin-off application expired and nothing more was said about losing the profitable chip division.
A day in the best of times for most workers is spent gazing at a computer screen. Some are in the laboratories taking measurements, but almost everyone else is at a keyboard doing design or writing a report about it. Since positions are specialized, an engineer will probably work almost exclusively with a small handful of programs. These are, however, big programs. There is a huge and multifaceted program to simulate circuits, another to simulate communications links, another to draw circuit boards, and so on. The software easily costs more than the computer that runs it and is indispensable. Design means to take some performance specifications and create a working device, which could be a chip, a part of the chip like an amplifier or an oscillator, or a smaller part of those circuits. And since Qualcomm doesn't manufacture much, most of those devices exist only in a computer. Many engineer's jobs can be summarized as running a specific computer program all day every day.
Any engineering situation that can be worked out sans computer, textbook style, doesn't fit the current state-of-the-art. Any real case needs computer simulation, so we turn to the software, and the programs are so full-featured that the computer can do a lot of the design. The computer still needs a user to set up the situation, and it can then run through cases to find the best specific numbers. But as the programs get faster, the projects become more complicated and take up all the computing power. An engineer with about fifteen years on me recalled that when he saw an early version of a program we both use, he assumed he would soon be out of a job since it seemed to to everything he could do. Time quickly showed that the opposite was true and we're now both in constant demand to run that program. Several straight hours in front of a monitor is standard, and is probably the work that engineers enjoy the most. But there's another part of the day that keeps us from doing our design.
Meetings are a necessary, yet disruptive part of the work day. They come in many sizes and lengths, but most last about one hour and involve about ten people. The meeting rooms are all equipped with easy-to-use projectors, so just plug in your notebook computer and you're ready to present. All the meeting rooms are also stocked with small refrigerators containing water and soda, some diet, but all with caffeine. Food is available if ordered, but strictly of mall food-court quality. The rooms are also equipped for telephone conferences, which can be a strange experience since the microphones and speakers are distributed throughout the room, including the ceiling. So you'll speak to the air and a booming voice answers from everywhere.
Most of the meetings are weekly status updates for a project or a group, and the success depends on who's in charge. The common mistake I've seen is poor time budgeting, so the work and challenges of the first few attendees are thoroughly explored, while the last few get rushed due to time limitations. The meeting rooms are almost always completely booked, and the next meeting will usually be knocking at the door when the time is up, so going over is usually not possible. I've been told that you need to chime in with something useful at least once during a meeting to prove your worth, a rule which many often don't follow.
A typical meeting is dull, yet informative. You generally don't learn anything impressive, since everything important has already been communicated through e-mail, but it helps to get a summary and presentation. Although they take you from your work, the meetings are a restful way to spend an hour or two. I've heard stories of meetings that descended into shouting matches, but in over ten years and countless meetings, I've never personally witnessed such an event.
"I can't get ahead in the company because I'm not Caucasian." These were the plain words a former colleague used to tell me and anyone else who was interested in how he was doing. I was skeptical, since the supervisor he didn't get along with was also an immigrant from Eastern Asia. Although, to be fair, it was a slightly different part of Asia. Being a technology company in California almost guarantees a diverse workforce, although of a certain mixture. Chinese and Indians are common, blacks and Hispanics are rare. But since approximately seven percent of American engineering degrees go to Hispanics, and five percent go to African-Americans, any deficiencies take place up-stream from Qualcomm's hiring pool.
There is a wide spectrum of people at Qualcomm, but the engineering side shows pronounced patterns. The women are almost all Chinese and Indian immigrants, and are married with children. The men are more varied, with a high contingent of Asians, but various European accents also abound. Many of us are single, which is unsurprising given our temperament. This may lead some to wonder if there is romance among the workers. The answer is yes, although in small amounts.
I've seen a few marriages between coworkers. For my first couple of years with the company I worked with a group containing a married female engineer, which I left. Checking back a few years later I was surprised to see she now has the same uncommon last name as a man who works with that group. I knew one engineer (not me) who pursued a female intern, but that went nowhere, which is how I think most of these situations turn out. In a "Taxi Driver"-like move he took her to see "Eyes Wide Shut", which had enough interesting parts to introduce insurmountable awkwardness.
The interpersonal interactions in the meetings, the offices and the halls usually have a corporate air about them. This means keeping the emotions flat and slightly on the cheerful side, with an extra effort not to be outrageous or offend. Conversation usually follow the "How's it going?"/"Fine." pattern. Criticism is rare and euphemistic. The term for any real fight is "personality conflict", said as if it were an unavoidable and blameless condition.
Most of us in engineering are genuine squares who don't have much to reveal, but the others, clerks, marketing, facilities, etc., are looser and could probably come up with some good stories. A few might be too good. In July of 2001 a technician showed up at the office with two handguns. From his view it was all a big misunderstanding: he'd forgotten the guns in his bag. But he was still promptly shown the door.
Natural personality traits have a role, but the groups also have different goals here. For the engineers and managers this is a career, while for many of the others this is a job. A few have stayed for years and risen through the ranks to positions like executive secretary or facilities manager, but most come and go. For them Qualcomm represents a decent, but not unique, job that they will have for a while and then move on.
Another difference is that the support staff are often native San Diegans while the engineers are almost all transplants. There aren't enough home-grown locals with the specialized education and experience required, so Qualcomm recruits engineers from around the world. There are a few engineers who lived in San Diego before they started work at Qualcomm, but they are rare. Almost all of us moved here after being hired. The more general positions don't require six year of specific engineering courses, and draw from the local population.
The groups don't mix much, but I sometimes hear a few snatches of life in passing. Once an attractive clerk was telling another something about reaching a state that almost made her pass out the night before, but the talk stopped when they saw me. I think it's safe to say that no one is passing out around any of the engineers.
The groups don't mix much, but I sometimes hear a few snatches of life in passing. Once an attractive clerk was telling another something about reaching a state that almost made her pass out the night before, but the talk stopped when they saw me. I think it's safe to say that no one is passing out around any of the engineers.
When I joined in the mid-1990's, Qualcomm had just transitioned from a small to a medium-sized company, and was in the process of transforming into a large corporation. There were fewer layers of management then, and the higher-ups were not accustomed to their new roles. The number three man in the hierarchy walked the halls with the engineers, attended technical meetings and could pop up in someone's office, all done with with infamous and intimidating bluster. I even saw the CEO, from a distance, at a few large meetings.
The vapours of the small technology company still lingered. There was a sense that everyone at Qualcomm was supposed to know everyone else. Dinners were provided in the conference rooms for those who stayed late, which was nearly everyone. Weekly movie night was in the auditorium, which doubled as an excellent theater, thanks to the digital cinema project. There were much fewer building then and they weren't crowded. Some long-time employees see that period as a golden age when the company didn't quibble over expenses. But, of course, it's easy to be nice when you've got a lot of money.
Qualcomm's first big money-earner was the Omnitracs communication system for trucking. The cellular phone networks were undeveloped then, so Qualcomm's satellite-based system had no real competition. Qualcomm could charge a premium for the equipment, and controlled the network so they could charge for each message sent. The system was like a proverbial license to print money, and it brought in a large and steady income through the 1990's to support the various research projects. One of those projects would reach fruition and completely define the course of the company. This was, of course, Qualcomm's plan to use CDMA for cellular phones.
While famously complicated in practice, CDMA is at root a conceptually simple way to send multiple messages over the same frequency band. The process starts with the transmitter, which multiplies the message with noise, producing a noise-like signal for broadcast. Any receiver that picks up the signal would just see random spikes that peak to the positive or the negative in equal measure and thus average to zero. The one exception arises when the receiver multiplies the signal by an exact copy of the transmitter's noise. The peaks and valleys then align perfectly, and since multiplying two negative numbers produces a positive number, the resulting signal is always positive, the average is not zero, and the receiver can find the message. For this to work, though, the two noise sources have to be exactly synchronized. If the receiver's noise source is off by just one percent, the message quality won't drop to eighty or fifty percent, but to zero percent. This right away suggests the first motivation for this type of communication, that of security.
The original research that created CDMA was in military contracts, and originated, like much of modern technology, in World War Two. The only known working system at that time was on the other side, as the Germans had a noise-based system to communicate across the Mediterranean Sea with Rommel's army in Northern Africa. For noise sources they used the jagged edges of spinning wheels, and would broadcast a tone separate from the message that the receiver would use to keep its wheel synchronized with the one in the transmitter. After the war, the leading development came to the USA and a series of military contracts to develop secure radio communication.
The systems, along with the noise, went digital in the 1950's, which solved the problem of how to generate and synchronize the noise sources. The digital systems use long sequences of binary numbers, millions of digits long, that run in continuous loops to act as the noise. These are the codes of "Code Division Multiple Access", and as long as the transmitter and receiver are using the same code, and the loops are synchronized, secure communication can take place. An added benefit of this security is the Multiple Access, meaning that the codes can separate users.
Because the broadcast signals are just noise without the right code, CDMA lets users with different codes use the same frequency band. The transmitter can use code A for user 1, code B for user 2, and so on. User 1 then receives the total signal and applies code A, causing the right message to emerge from the noise. The other messages in the signal remain noise, producing an average of zero. The other users apply their codes and get just their messages to come out of the noise. Each code acts like a key that both locks and unlocks the message into the noise of the frequency band.
Because the broadcast signals are just noise without the right code, CDMA lets users with different codes use the same frequency band. The transmitter can use code A for user 1, code B for user 2, and so on. User 1 then receives the total signal and applies code A, causing the right message to emerge from the noise. The other messages in the signal remain noise, producing an average of zero. The other users apply their codes and get just their messages to come out of the noise. Each code acts like a key that both locks and unlocks the message into the noise of the frequency band.
This is different from the scheme used by the first-generation cellular phones of two decades ago. Anyone who's used a radio or television is familiar with Frequency Division Multiple Access (FDMA), where each user gets one dedicated frequency channel to use exclusively. The first cellular phones used FDMA since they were basically small FM radio stations. In the American system, each user got a 30 kHz channel for base-to-mobile communications, and another 30 kHz channel for mobile-to-base connections. This worked in the 1980's, when the cellular phone market was small and the demands were for basic voice service. The problem came in the 1990's, when there weren't enough channels to meet demands, and the channels were too small for services like internet access, music and pictures. That prompted the switch to the second generation of cellular phones, which used digital technology. The problem hit first in European countries, which were using a mixture of systems that were mostly inferior to the American system. So the Europeans began the development of their digital system, called GSM.
The second generation cellular phone systems introduced Time Domain Multiple Access (TDMA), which increased capacity by divided users into time slots. The new methods of encoding and compressing an audio signal into a digital bit stream were efficient enough that a segment of audio could be transmitted in a fraction of its real duration, which frees up the channel for other users. GSM would still divide the users into channels, but then would also divide the channel into eight time slots. Each user would have about half of a millisecond to use the channel exclusively, and then the next user would have it. The channels were a relatively wide 200 kHz, which allowed for better digital transmission, and the TDMA setup increased capacity, so the strategy seemed like the right way to go.
Firmly behind, the American cellular phone industry followed the European lead into TDMA as the basis for the second generation in the USA. In a Cellular Telephone Industry Association (CTIA) conference held in August of 1987, TDMA beat FDMA by 37 votes to 16. The situation became more urgent when the first GSM systems reached the market in Europe in 1992. The CTIA board that year unanimously endorsed TDMA as the basis for digital cellular phone systems. Into this milieu came Qualcomm, advancing CDMA as a better starting point. It was a bold suggestion, and Qualcomm was perhaps uniquely situated to make the proposal.
Qualcomm's origins lie in the late 1960's, when a small group of communications professors founded a company to do consulting work. That company, Linkabit, was successful and grew through the 1970's, mostly doing satellite communications contracts for other corporations and the military. They designed, for example, HBO's scrambled satellite link. With an eye on larger opportunities, the founders sold Linkabit to large defense contractor M/A-COM, but they soon grew disillusioned with the management. A group of engineers left Linkabit and founded Qualcomm in 1985, with no product in mind other than a lot of experience in wireless communications technology, including CDMA. One possible application for their expertise was cellular phones.
The industry met Qualcomm's CDMA proposal with deep skepticism. The technology looked good on paper, and performed well for expensive military and satellite links, but how could it work in a consumer product? The timing problem alone seemed insurmountable, since the code loops of all the transmitters and receivers in the system had to be synchronized to within a fraction of a microsecond for any communication to be possible. And there was the unknown real capacity of a CDMA system. With FDMA and TDMA, once users occupy all the frequency and time slots, and there are a clearly defined number of slots, the system is at capacity. Using CDMA, however, the users send their noise-like messages through the same frequency band at the same time. As new users join the noise level rises and at some point overwhelms the receivers, stopping communication. That limit on the number of users depends on many environmental and system factors. Since a working CDMA-based cellular phone system had never been built, it's potential, or lack thereof, was unknown.
Qualcomm arranged a demonstration in November of 1989 to test the concept. Working with PacBel, Qualcomm engineers set up a small CDMA-based system in Sorrento Valley using a van packed with electronic equipment to simulate the cellular phone. They solved the timing problem by using GPS, although that system was so new that only a few satellites were operational and they had to delay the demonstration until the satellites were overhead. The demonstration succeeded and showed that the basic ideas worked, even if most of the details were still undefined. Cellular service providers would consider buying into the technology if Qualcomm could make it work, but the industry was still on course to use TDMA. This left Qualcomm alone to develop a CDMA-based cellular system, a risky position to be in, but one that would pay off immensely less than a decade later.
No one was certain, however, about the future success of cellular phones at the time, and there were other big projects in Qualcomm when I joined. One was wireless local loop, which would replace the wires in regular phone systems with wireless links. This is similar to cellular phones, but much easier since the houses don't move and the antennas could be large and placed on the roof above obstructions. This was supposed to be popular with developing countries, which could skip the step of building wired communication infrastructure. Qualcomm was not only designing the systems, it would also make the phone company switching equipment, the antennas, and even the phones. It could have been impressive, but was swept aside by the cellular phone. Another big project that we assumed would be the future of the company was personal satellite communications.
Qualcomm's Globalstar system was another misfire that came and went, taking a lot of money with it. In response to Motorola's Iridium satellite phone system, Qualcomm teamed up with Loral to make it's own version. Work began in building "A" and later moved to the newly constructed "R". It was an exciting project that had a high profile within the company. No one had built a satellite phone system yet, but the idea seemed sound and promising, which is a similar position to using CDMA for cellular phone systems. The difference is that when satellite phones hit the market not with a sharp bang, but with a dull thud. Commercial service for GlobalStar began in late 1999, just after Iridium had filed for bankruptcy. Service was expensive at $1.50 per minute, and with the expansion of the cellular phone systems in the previous few years, and the emergence of international standards like GSM, few people needed it. GlobalStar is still in business servicing the small market of people in the middle of the ocean or a desert. By then the CDMA project had come to fruition, so the sting was not too sharp.
By the late 1990's, CDMA-based cellular phone systems were running and doing well in several markets around the world, and Qualcomm owned nearly the entire technology whole. The equipment, the patents, and the know-how were almost exclusively from Qualcomm. The second two categories were as good as gold, while the first was sheer heavy lead. Since no other company was interested in making equipment for CDMA systems back in the early 1990's, Qualcomm had started making and selling its own infrastructure equipment, chips and phones. Then came success and other companies, such as Finnish giant Nokia, began not only making the equipment, but doing it more cost-effectively than Qualcomm.
By the late 1990's, CDMA-based cellular phone systems were running and doing well in several markets around the world, and Qualcomm owned nearly the entire technology whole. The equipment, the patents, and the know-how were almost exclusively from Qualcomm. The second two categories were as good as gold, while the first was sheer heavy lead. Since no other company was interested in making equipment for CDMA systems back in the early 1990's, Qualcomm had started making and selling its own infrastructure equipment, chips and phones. Then came success and other companies, such as Finnish giant Nokia, began not only making the equipment, but doing it more cost-effectively than Qualcomm.
Manufacturing consumer products was clearly not part of the company's basic skill-set, to use business-drone language. The CDMA equipment divisions were huge money-drains for the company, and kept the stock price puttering along at a moribund level. Even the announcement in 1998 that the next version of GSM would drop TDMA and go with CDMA barely registered in the price. Qualcomm tried to compete by digging into the cost-watching trenches. Every penny matters when you're trying to produce low-cost consumer goods. The is when the previous free-spending ways went by the wayside and Qualcomm completed its transformation into a modern corporate giant. Yet the products still couldn't keep up with the competition. Finally, in 1999, Qualcomm excised those divisions and turned profitable.
I remember the layoffs and division sales of 1999 as a time of extreme lows followed by extreme highs. Seven hundred employees were dismissed, out of about 11,000, and, of course, in such situations rumors abound. The most popular one that I heard was that upper management had reached an agreement with the state of California not to dump too many new unemployed into the marketplace at once, so the layoffs would come in waves with a few weeks' spacing. This may demonstrate how highly we placed ourselves. While momentous for us, to the state, of course, a thousand or two layoffs is only the lightest drop in the bucket. But the February layoffs, and the sale of the infrastructure division to Swedish company Ericcsson, were the one-time adjustment that the company needed, and we quickly forgot about the unpleasantness as the stock price rose rapidly, or more accurately, insanely.
Stock-watching was the unofficial sport within Qualcomm in 1999. After spending years without doing much of anything, the stock price rose by over a factor of ten throughout the year, and the employees were interested. Most of us had a stake through stock options we received as hiring bonuses and from the employee stock purchase plan, where a steady deduction from our paychecks went to buy stock. I remember stock charts and information being on every computer screen in the offices and in the labs. A person could sit at one of these screens and just keep pressing the refresh key without seeming strange or neurotic. As a final cap on the year, the price rose 31 percent on December 29 based on the recommendation of one analyst at PaineWebber. That final surge didn't hold, as the price retreated over the following few months, but remained enormously higher than it had been throughout the 1990's.
Most of us, but not everyone, did well. There are the usual regrets that you didn't sell at the highest price, but if you were holding stock at the start of the year, by the end of the year you were richer. Not everyone had stock, though. I heard a story soon after I joined about an engineer who went to visit one of the testing floors and got an unexpected hug by an ecstatic co-worker. Apparently he had just cashed in his stock options and had cleared $80,000. Two years later those options would have been worth well over a million dollars. And I sometimes heard a grumble from someone that had sold out earlier and missed the big price rise. Particularly hard hit were those who had been with the company more than five years, since all of their stock options had vested and many had sold. The laid-off employees, and those transferred to Ericsson were also displeased, and some tried, unsuccessfully, to sue Qualcomm to cash their lost stock options.
The Qualcomm boom of 1999 changed San Diego like Microsoft changed Seattle. It unleashed thousands of employees on the city with hefty stock gains. Success and expansion brought thousands of more employees with $100K+ salaries. Related companies opened here, like Sequoia, NextWave, and design centers for companies such as Nokia. Along with bio-tech, the new wireless industry established north San Diego as an internationally-known technology area. The cycle became self-feeding, as the reputation and business attracted more people and business. Qualcomm has also donated heavily to UCSD for engineering and wireless research, further growing the local industry. Most of the new employees have been recruited from around the world, so how much locals share in this boom is open to debate. There was a time when working hard in San Diego meant bartending at two places, and for much of the population not doing technology or servicing the large companies, that may still be true.
All of San Diego's expansion in the past fifteen years does not lie on Qualcomm's doorstep, but a large part does, and the effect could be felt even before the boom period of 1999. By the mid 1990's, Qualcomm had plenty of cash and a tall reputation in the city. The company paid $18 million in 1997 for 20 years of naming rights to the local football stadium, just before Super Bowl 32 was held there. Qualcomm was already the largest non-governmental employer in San Diego by then, picking up the economic slack from the defense slowdown a few years earlier, and acting as the showcase to attract more business to the area. The upturn in local fortunes led to a long local economic expansion starting in the mid 1990's.
The physical changes prosperity has brought San Diego are unavoidable, with more traffic, more developments and fewer open spaces. As recently as 1996, Mira Mesa Boulevard seemed rural for some long stretches, and is now completely developed from start to finish on both sides. Further to the north are the large and expensive tract houses spread out through the rolling hills and valleys. Even with the notoriously easy credit of the early 00's, it takes a lot of affluent people to spur and populate those developments. Several engineers that I knew bought into those developments when the stock price went through the proverbial roof. Throughout the year 2000 the stock slid from it's peak and lost over half of its value, taking much of the feeling of wealth with it. One of my fellows backed out of his deal, giving up a five thousand dollar deposit, but another went through with it. Fortunately for him, he sold in 2003 and avoided the real estate crash.
Heaven help San Diego if Qualcomm specifically or the wireless industry in general hits a major downturn. A glance at technology companies with longer records suggests that the upward trend will end someday--decrepit Motorola spent decades as the wunderkind of American high-tech before a few missed opportunities saw it falling to the rear. But this isn't Chicago, where Motorola makes up a minuscule part of the workforce and economy.
Qualcomm's future is open to any prediction, but it will probably do well for the next several years. The ownership Qualcomm held over CDMA-based cellular phones is fading into the past as the industry advances. European companies particularly have been developing technology that goes around Qualcomm's patents. And with patents having a lifetime of twenty years, the fundamental patents from the early 1990's will start expiring soon. To meet the challenge, Qualcomm has spent some of its immense pool of money on expansion and hiring, and is now deeply entrenched in almost all aspects of the wireless industry. Wi-fi, bluetooth, voice over internet, Qualcomm now has a hand in it all, following the strategy that owning a piece of many technologies will make up for lowing complete ownership of one technology.
A strong sense of optimism flows throughout Qualcomm, as if almost anything is possible with enough dedication. And why shouldn't there be? The company's history has been a sequence of huge successes, with a few fizzled goals that weren't nearly large enough to pull the company into a major setback or a slide into mediocrity. Most of us are not corporate-planning types who think about such large-scale directions. There is a lot of new products to create, the number of projects increases every year. For an engineering type that's sweet music. And so we sit ensconced in our offices and meeting rooms, busily carrying out the work at hand.
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