Charlie Rose talks to Qualcomm’s Paul Jacobs “There will be 5 billion smartphones sold between now and 2016”

The CEO of the world’s dominant maker of cell phone chips discusses the future of the smartphone on the eve of the Consumer Electronics Show


You saw the importance of smartphones early, didn’t you?

Oh, yeah. We put the Internet protocols into cell phones in the early ’90s before people even knew what the Internet was. And I did a phone with Palm very early on. A funny story is, I had an Apple Newton at the time, and I tried to do a deal with Apple to put a radio inside the Newton and make that into a smartphone. They weren’t interested, so I went across the street to Palm. But I’m thinking, well, this probably isn’t the best device to be carrying. I go up to reception, and they have a little PalmPilot brochure shaped like a Pilot; I Scotch taped one onto my Newton. It all worked out.

A lot’s happened since then. What can we expect next?

There are a lot of opportunities for us. Obviously, the smartphone trend is going to continue. It’s growing like crazy. And now we’re seeing PCs really being subsumed by smartphones, whether it’s tablets or the fact that Microsoft put Windows on top of our chips. Then I look out even farther into the future and I say, boy, this wireless technology is going to be an enabling technology for a lot of other industries. And one of the areas that we’re really focused on is health care. The idea is that the phone is going to sit at the center of a web of sensors that you’ll have on your body. You may actually even have them inside your body. Let me tell you something that’s pretty cool. There’s a researcher we’re working with who has an idea to put a tiny chip inside your bloodstream ... and it’ll maybe lodge in your wrist and look for certain indicators that in two weeks you might have a heart attack. Can you imagine that? So your phone will ring and tell you to go to your doctor.

And that really exists?

That’s in the lab right now. People are working on that now.

Are there a billion smartphones yet?

There are. Let’s just take China. There’s a billion connections in China right now, and about 27 percent of those are what I would call mobile broadband. People are using phones instead of a computer. They don’t even have a computer. So 84 percent of people [in China] read their news on a smartphone. In the U.S., it’s less than a third of people. We think we’re advanced in the U.S., yet in China, in India, you see people using them for all these different entertainment and information applications, and they’re ahead of us because that’s the only way they can get access to that stuff.

It’s a huge market for you.

There will be 5 billion smartphones sold between now and 2016.

How important has Apple been to Qualcomm?

It’s been very important. They really did a lot of work to popularize the wireless Internet. Like I said, we were putting the Internet protocols into phones in the early ’90s, but it wasn’t really breaking through to the mainstream.

What changed?

Apple is an amazing marketing company. They made a user interface that wowed people.

So the iPhone was a driving force?

It was happening, but I think that helped the curve really ramp up, and it raised the bar. People were obviously building smartphones all along, but Steve Jobs had a way about him to really get into the mind of the consumer and popularize things.

Isn’t our hyperconnected world vulnerable to hackers?

There’s no question that there’s an opportunity in any electrical system, any computing system, for things to happen. In health-care systems, there’s generally a lot of redundancy in those systems because they build them that way. So I think there is less risk in that case. But it is absolutely a focus of the industry to build better and better systems to deal with cybersecurity threats. And we all know hackers are out there, and they will do things. And so you really need to spend a lot of effort to make sure that you can stay one step ahead of what’s going on there. But you know, it’s somewhat of a cat-and-mouse game.

So what can go wrong in the future you’ve laid out?

If you have overregulation ... India is a perfect example, where they had to get spectrum allocated and, in fact, operators put money into building these networks. Then the government came along and said, “Oh no, these licenses weren’t granted the right way.” They’ve created this whole issue of, can I actually transmit on that spectrum anymore? Can I run my service? So the issue of regulation and of not having enough spectrum available can harm us.

Watch Charlie Rose on Bloomberg TV weeknights at 7 p.m. and 10 p.m. ET


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