Interopera-what?

Qualcomm's Edge

Companies like chip manufacturer Qualcomm confuse some journalists, particularly those who might consider sales of product the principal source of a company's revenue.    If operating revenue (from chip sales) goes down during the course of any one year, how is it that overall revenue increases over the same time?

The answer is through leveraging innovation.

The reality is that Qualcomm has long considered itself not as a mere producer, but as a licensor of enabling technologies.   Anecdotally, in 1999, the company came to the realisation that it didn't have to produce any products in order to be a profitable company.  In fact, it realised that it could actually make money from competitors' sales.

Late last year, Engaget posted some photos of Qualcomm's "Patent Wall" in its San Diego headquarters (see below).   The pictures were interesting to me, and not for reasons related to interior design.  It is clear that the company places significant value on its intellectual property.   

The Engaget article containing the pictures below suggests that the patents on the wall comprise only about 10 percent of the total patent portfolio owned by Qualcomm, which apparently numbers around 13,000 patents in total.  If only a quarter of those are of strategic value, this is all the explanation we need.  Strategically leveraged IP safeguards the overall revenue position of the company regardless of the fluctuating world of of sales performance and operating revenue.