powering the mobile computer: cdma and the 3g wireless revolution

Powering the Mobile Computer: Powering the Mobile Computer: CDMA and the 3G wireless revolutionCDMA and the 3G wireless revolution

Klein S. GilhousenSenior Vice President QUALCOMM

Telecosm 2004, Squaw Valley, CA

Safe Harbor

Before we proceed with our presentation, we would like to point out that the following discussion will contain forward-looking statements from industry consultants, QUALCOMM, and others regarding potential market size, market shares, and other factors which inherently involve risks and uncertainties. These and other risks and uncertainties relating to QUALCOMM’s business are outlined in detail in our most recent 10-Q and 10-K forms filed with the Securities and Exchange Commission. Please consult those documents for a more complete understanding of these risks and uncertainties. This presentation may include a discussion of "non-GAAP financial measures“ as that term is defined in Regulation G. The most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the company's financial results prepared in accordance with GAAP have been posted on the company's Investor Relations web site at http://www.qualcomm.com/IR/


We have always been in the semiconductor business

• Our first hardware deliverable product was a full custom Viterbi algorithm decoder chip ~ 1987

• We have always recognized that the key to feasibility of CDMA was VERY aggressive custom chip design

• First chip sets required three devices for a mobile phone – 1991

• Second go around compressed the original 3 chip design into a single chip enabling a fully functional dual mode AMPS/CDMA phone – 1992

• Third generation enabled the first commercial dual mode AMPS/CDMA phone – the QCP-800 - 1995

• Now focused on chip business leaving phone and base station products to others


First Generation CDMA PHone


First Commercial CDMA Phone – QCP800


Semiconductor Business

Technology Licensing

Wireless Internet

Intersegment Elim/Other

CDMA Market Growth is Key Shareholder Value Driver Results Excluding QSI

QCT QTL QWI Other

$2,250

60%

$773

34%

$1,180

31%

$1,084

92%

$433

11%

$14

3%

($100)

(3%)

$33

n/a

Revenues

Revenues as % of Total

EBT

Earnings as a % of Revenues

Q3 FY’04 YTD(9 months)

(Millions)

Cash & Marketable Securities $7 Billion as of June 2004

July 13, 2004 announced:Two for one stock split effective August 13, 200440% increase in quarterly dividend payable on September 24, 2004


QCT Revenue Growth1996 - 2003

= QCT Revenue as % of Total QUALCOMM Revenue= QCT Revenue as % of Total QUALCOMM Revenue

$1.6B in FY 2002 = 54% of total QUALCOMM Revenue

$2.4 B in FY 2003 = 63% of total QUALCOMM revenue

FY '96 FY '97 FY '98 FY '99 FY '00 FY '01 FY '02

21%

63%

FY '03

54%


Source: FSA, On the Fabless Front 2004, Business Wire

$0.63B

$0.82B$0.83B

$1.08B$1.12B

$1.30B

$1.51B$1.61B

$1.84B

$2.47B

QUALCOMM NVIDIA Broadcom ATITechnologies

Xilinx MediaTek SanDisk Altera Marvell Tech. Conexant

Semiconductor Revenue Drives our Business

Top 10 Fabless Companies Worldwide Company Revenues by Calendar Year ‘03 & by Q4 ‘03


Cumulative ASICS Shipments

0

200

400

600

800

1,000

1,200

1,400

1,600

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04YTD

MSMs

Total ASICs

(Millions of Units)

Over 1.4 Billion ASIC’s Shipped to Date


105

3

125

17

139

47

153

88

167

137

178

209

-

50

100

150

200

250

300

350

400

Mil

lio

ns

of

Un

its

2003 2004 2005 2006 2007 2008

CDMA/WCDMA Handset ForecastIndustry Analyst Average

WCDMA

CDMA

TAM more than triples in 5 years

29% CAGR


Cellular Handset Semiconductor Revenue

0

5,000

10,000

15,000

20,000

25,000

30,000

2003 2004 2005 2006 2007 2008

$M

GSM, TDMA, PDC GPRS, EDGE UMTS, CDMA 2000 (1X RTT, DO, DV)

The Competitive Landscape May Change…..As the market for non-CDMA based standards shrinks

Source: IDC, 2004

Wireless IC Revenue by Standard

38% CAGR


A Dynamic Wireless Economy

Growth VectorsMarket opportunities

Wireless Economy

Increasing Tele-density Extending Voice Services

into emerging markets

Move to greater segmentation [multi-tier]: enables dynamic growth in wireless

Drive to data: Key to increase in ARPU

1x EV-DO, WCDMA/HSDPA, EV-DV

Integrated Multimedia: Market can only be fully exploited by reducing costs and TTM

Multi-mode: All future devices are multi-mode…global communication

Increasing demand for content and applications continue to be critical for wireless growth

Migrating Voice to Data 3G Network Deployments

around the globe: DO, WCDMA, DV

Converging Multimedia & Wireless Mobility Combining mobility with

location, audio, camera, video & gaming

2008~1.8 billion voice users

20071+ billion

data users

2006>600 million MM

users


Leveraging our Experience and Competitive Position

The largest, most experienced team focused on CDMA

Leadership in wireless systems

Our unique model brings us closest to operators and OEM partners

Most complete and proven solutions in the industry

Cost structure enables our partners to compete in every segment

Long-standing working relationships with operators and customers

The largest, most experienced team focused on CDMA

Leadership in wireless systems

Our unique model brings us closest to operators and OEM partners

Most complete and proven solutions in the industry

Cost structure enables our partners to compete in every segment

Long-standing working relationships with operators and customers

EngineeringEngineering

Systems ApproachSystems Approach

Business ModelBusiness Model

Market TestedMarket Tested

Segmented ProductsSegmented Products

RelationshipsRelationships


QCT PositioningOur Value to the Industry Originates with Our Complete Solution

Handset and Infrastructure Customers

Support

Tools

Digital IC

Analog RFIC

Launchpad™ Applications

SuiteSoftwareProtocol Stack


Product Platform | Overview

PLATFORM POSITIONINGPLATFORM POSITIONINGPLATFORMSPLATFORMS

• Feature-Rich, Data Enabled Devices

• Integrated multimedia capabilities reduce cost for conventionally higher-end applications

• New form factors to address enterprise and consumer requirements• Multimedia content & creation

• Wireless Technology Merge w/ Consumer Electronics

• Devices Optimized for Multimedia Applications

• Productizes enhanced 3G features and applications for new network services

• Low-Cost Entry Devices

• Provides carriers with cost competitive capabilities to enable a broader base of devices for CDMA2000 & WCDMA


Our Product Platforms Developed Through Interaction With Operators

QCT Complete Solutions Strategy

• Global product roadmap

• Stability

• Seamless 3G / 2G handovers

• Choice & variety

• Fast time to market

• Cost effective

• 3G rollout experience must be equal to or better than 2G!

Fully tested, optimizedsolutions

QCT DIRECTIONQCT DIRECTIONCUSTOMER REQUIREMENTSCUSTOMER REQUIREMENTS

Operator-Focused PlanningOperator-Focused Planning

Tiered platforms utilize common

apps SW

Tiered platforms utilize common

apps SW

Fully Segmented,

Global product roadmap

Fully Segmented,

Global product roadmap

Broad feature

sets

Broad feature

sets


Cost Leadership

CMOS

Greater processing speed

Lower power => lower cost / longer standby time for improved user experience

Easy migration for OEMs: design re-use advantages

Providing OEMs with low-cost path to smaller footprint

90 nm

130 nm

We will be ahead of the industry in innovating cost-competitive solutions and delivering them on schedule…!

90nm

Reducing costs for datadevices to drive

Mainstream Acceptance

Reducing costs for datadevices to drive

Mainstream Acceptance

The industry’s first CDMA2000 chipsets to use RF CMOS Ensures price-competitive entry-tier solutions for emerging markets

The industry’s first CDMA2000 chipsets to use RF CMOS Ensures price-competitive entry-tier solutions for emerging markets


• US– UMTS1900 and UMTS850– EDGE

• Japan– UMTS2100 and UMTS800– i-mode (Access browser)

• Europe– UMTS2100

• China– UMTS2100– EDGE and UMTS1800 becoming

likely

• ROW– Predominately SE Asia– UMTS2100 with UMTS1800 likely

WCDMA Handset Forecast, Mil (CY04-CY08)

0

10

20

30

40

50

60

70

80

90

US Japan Europe China ROW

Mill

ion

s o

f H

an

dse

ts

WCDMA Market Opportunity - Volume


Ramping Customer AcceptanceWCDMA Customers - Cumulative(Calendar Quarters)

2002 2003 2004

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2

4

6

8

10

12

14

16

18

20

22 23

Q3


QCT Product Platforms COMMON CORE FEATURESCOMMON CORE FEATURESPLATFORMSPLATFORMSSAMPLINGSAMPLING

‘04 -‘05‘04 -‘05

‘03 -‘04‘03 -‘04

‘02 -‘03‘02 -‘03

‘05 -‘06‘05 -‘06

• Dual CPU• 6.0 megapixel digital camera • 30 fps digital video record & playback • 4M triangles/sec. 3D graphics acceleration• High-fidelity digital stereo audio record/playback

• Dual CPU• 6.0 megapixel digital camera • 30 fps digital video record & playback • 4M triangles/sec. 3D graphics acceleration• High-fidelity digital stereo audio record/playback

• 30 fps CIF Video Playback & Streaming• 4 megapixel digital camera• AAC encoding• 400k triangles/sec. graphics acceleration• Integrated QCamera, CMX, Qtv, Qcamcoder gpsOne

• 30 fps CIF Video Playback & Streaming• 4 megapixel digital camera• AAC encoding• 400k triangles/sec. graphics acceleration• Integrated QCamera, CMX, Qtv, Qcamcoder gpsOne

• Sub-QCIF• Voice-centric• Limited Launchpad support

• Sub-QCIF• Voice-centric• Limited Launchpad support

• 15 fps QCIF Video Playback & Streaming• 2 megapixel digital camera• AAC, aacPlus decoding• 100k triangles/sec. graphics accelaration• Integrated Qcamera, CMX, Qtv, Qcamcoder gpsOne

• 15 fps QCIF Video Playback & Streaming• 2 megapixel digital camera• AAC, aacPlus decoding• 100k triangles/sec. graphics accelaration• Integrated Qcamera, CMX, Qtv, Qcamcoder gpsOne

120+ Designs

120+ Designs


QCT Chipset Roadmap OverviewMULTIMODE | All GSM/GPRS Capable

CDMA2000 CDMA2000 + GSM-GPRS WCDMA (UMTS)

1X 1X 1xEV-DO(Rev. 0)

1xEV-DV(Rev. D)

1xEV-DO(Rev.A)

+ UMTS/ EDGE/HSDPA

GSM/GPRS EDGE/HSDPA

CONVERGENCE

PLATFORMDual CPU On-Chip

ENHANCED

PLATFORMEnhanced Multimedia

& Graphics

MULTIMEDIA

PLATFORMMultimedia & 2D-3D

Graphics

VALUE PLATFORMIntegrated gpsOne Voice & Data Voice

60001Q ‘02

60253Q ‘03

60501Q ‘02

61003Q ‘02

61502Q ‘04

63003Q ‘02

65502Q ‘04

67004Q ‘04

68001Q ‘05

75001Q ‘05

76002006

72004Q ‘05

62002Q ‘02

62251Q ‘05

62502Q ‘03

62754Q ‘04

65002Q ‘03

62802H ‘05


There are many ways to support Applications/Services for handsets

Non-Integrated SolutionNon-Integrated Solution

Ringer Chip

Video ASIC

3D Gaming

ASIC

Camera Module

with DSP

AppsCo-

Processor

CameraSensor

Highly Integrated QCT SolutionHighly Integrated QCT Solution

RingerASIC

Video ASIC

3D Gaming

ASIC

Camera Module

with DSP

Apps.Co-

Processor

CameraSensor

• Smaller Form Factor

• Lower Overall Costs

• Faster Time to Market

Processor


What is in a QUALCOMM Chipset?A Leader in delivering Wireless Solutions

Always striving to achieve Semiconductor Excellence

• Smaller Form Factor

• Enhanced System Performance

• Highly Integrated Applications

• Greater Quality & Reliability

• Reduced Power Consumption

• Lower Overall Costs

• Faster Time to Market

MemoryMemory

Micro-Micro-ProcessorProcessor

GSM/GPRSGSM/GPRS

DSPDSPGPSGPS

3D Graphics3D Graphics

VideoVideo

AudioAudio

ImagingImaging

CDMACDMA

DSPDSP

PMRF


Commercially Ready Solutions Enable Mass Market Devices

WCDMA


QCamera: OverviewComplete Digital Still Camera Application for the MSM

• 1.3M to 4M Pixel support depending on MSM• Example User Interface• Picture Viewfinder up to 30 frames per second• Picture taking application• JPEG (JFIF) encode at user-definable quality levels

– Tradeoff between quality and file size

• PNG encode• Self Timer• Digital Zoom• White LED flash support• Create and View Albums• Image Process Library for image manipulation• Transmit pictures to other users• Save pictures to FLASH or MMC• GPS Location Information• BREW Interfaces for 3rd party imaging/value-added functionality


Qualcomm’s Mobile Video Solutions


Video Codecs:• MPEG-4 Simple Profile Level 0b• H.263 Profile 0/3 Level 45• H.264 Baseline• RealVideo 8, 9, 10

Audio Codecs:• QCELP -- 13kbps fixed full and half rates• EVRC -- 8kbps fixed full rate• AMR-NB – all rates• AAC Low Complexity-- 128kbps, 64 kbps, 32kbps, & 16kbps• AAC Plus - 128kbps, 64 kbps, 32kbps, & 16kbps

A feature rich video decoder that enables mobile devices to stream & playback content files. Qtv is the heart of wireless applications including streaming video on demand (VOD), mobile live cams and video mail services.


A video encoding solution built upon QCT’s camera architecture and API’s. The solution offers real-time encoding of video to enable video messaging applications.

Video File Format:• MPEG-4 Simple Profile Level 0b• H.263 baseline Profile 0 and Level 45

Audio File Format:• QCELP – 13.3kbps fixed full and half rates• EVRC -- 8kbp fixed full rate• AMR -- 12.2kbps

File Extension Support:• .3g2• .3gp• .amc• .k3g• .skm


Qcamcorder Feature Rich Application

• Video Preview Mode & Viewfinder• Constant Bit rate Encoding Quality (Low=48kbps,

Med=64kbps, High=80kbps )• Record Movie, Stop Record Movie & Pause Movie functions• Zoom Control• Brightness Control• Contrast Control• Save Video Output Media Selection: Flash or MMC• Audio Dubbing • Video Editing • CIF, VGA and MP image sensor support• Interoperates with Qtv


2-way video conferencing application that had been tailored to 3G networks such as EvDO and UMTS.

Video File Format:• MPEG-4 Simple Profile Level 0• H.263 Profile 0 / 3, Level 10

Audio File Format:• AMR -- <12.2kbps• EVRC -- 8kbps fixed full rate• G.723.1 – all rates

Protocols:• H.324M• SIP• H.245 Control Protocol for reliable transmission• H.223 for Multiplexing/De-Multiplexing


Qvideophone Feature Rich Application

• A reference videophone application is provided to OEM’s in source code which contains many of the basic functions/features. QCOM exposes the API’s to enable OEM’s to customize and enhance the reference application to suite the needs of their customers.

• Reference app includes features such as:

• Push to Video

• Picture-in-Picture Support

• Video Zooming

• Ability to convert to an audio-only call at any time (Speech Fallback)

• Video or Audio Mute Capability

• User Selectable Encode Quality Settings

• Set-up, Call, Hold and End Call

• PSTN Interoperable (Mobile to PC video call)

• Interoperates with Qtv™& Qcamcorder

Thank youThank you

powering the mobile computer: cdma and the 3g wireless revolution

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