Qualcomm Wants to Be Famous

Qualcomm is already worth more than Intel. Now the chip maker wants everyone to know it.

Qualcomm sells chips that go inside TVs, BMW dashboards, game consoles, and, most important, one-third of smartphones sold. It did $19 billion in business last year, and its stock market value has surpassed that of rival Intel.
But for all Qualcomm’s success, it’s like the Rodney Dangerfield of chip companies: it gets no respect. Intel’s name is still synonymous with microprocessors. Even in San Diego, Qualcomm’s hometown, the average person knows the company because its name is on the football stadium, not because its products run the all-important computers in their pockets.

Qualcomm’s chief marketing officer, Anand Chandrasekher, is frank about the company’s name recognition: “It’s not great.”
While it may not seem to matter whose chips are in your device, Qualcomm is trying hard to become a household name. With TV ads, noisy promotions, prizes, and YouTube videos, the company has been stepping up efforts to promote its Snapdragon line of chips for smartphones directly to consumers.
Chandrasekher, who worked at Intel for 18 years and took the Qualcomm job last August, wants to make sure phone shoppers recognize the Qualcomm name. “That’s why I’m here,” he says. “We’re a $100-billion-plus company, in terms of market cap, that nobody knows.”

Qualcomm executives began expanding the consumer marketing program in 2011, when the company realized that gadget fans were comparing specifications for smartphones as if they were PCs or even cars. If Qualcomm can get consumers to prefer phones with its chips, it could charge smartphone manufacturers higher prices or more easily fight its way into other markets, like desktop computers.
Qualcomm’s efforts echo the famous “Intel Inside” campaign launched during the 1990s, which saw the rival chip maker slap its logo onto nearly every PC. Intel ended up with a brand as well recognized as Disney or Coca-Cola.

Although Intel’s campaign was an inspiration, Chandrasekher says the mobile phone market is different from the market for PCs—it moves faster and requires more players working together to make a single device, and the phones don’t have room for physical stickers.
Instead, Qualcomm has tried to get its name in front of consumers in other ways, starting in San Diego. Two years ago, it convinced the city to change all the signs at Qualcomm Stadium to “Snapdragon by Qualcomm” during 10 days in December 2011, when several nationally broadcast football games were played. The move was an advertising coup, even though the city’s attorney later called the name change illegal.
Qualcomm won’t say how much it spends on marketing. But it has been working with four branding, PR, and advertising firms to developing movie theater and TV ads that will feature its new dragon mascot. In its ads, Qualcomm has tried to entertain, but it also has to make technical arguments about why its chips are better. Last year, Qualcomm engineers sat down to help brainstorm what Chandrasekher calls “viral videos” of quirky experiments involving melting butter and praying mantises—the idea being to illustrate the thermal and power efficiency of Snapdragon chips. Those videos have gotten two million views on YouTube, and some smartphone makers have begun featuring Qualcomm’s chips in their own advertisements.
There have been missteps. To say that Qualcomm CEO Paul Jacobs’s keynote at the annual Consumer Electronics Show this January came across as trying too hard would be putting it lightly. There were appearances by Big Bird, Nobel Peace Prize winner Desmond Tutu, rock bands, and awkwardly scripted actors playing stereotyped young people. Technology bloggers present at the Las Vegas show offered reviews that ranged from “insane” to “all over the place.”
Chandrasekher admits the CES show was “not as well received” as he had hoped. “We’ve been learning. You learn and move on,” he says. “People are starting to care about what’s inside their phones. We’ve invented a lot of these technologies and we feel, maybe rightly, that we should get some credit for it.”

He Has Millions and a New Job at Yahoo. Soon, He’ll Be 18.

One of Yahoo’s newest employees is a 17-year-old high school student in Britain. As of Monday, he is one of its richest, too.

That student, Nick D’Aloisio, a programming whiz who wasn’t even born when Yahoo was founded in 1994, sold his news-reading app, Summly, to Yahoo on Monday for a sum said to be in the tens of millions of dollars. Yahoo said it would incorporate his algorithmic invention, which takes long-form stories and shortens them for readers using smartphones, in its own mobile apps, with Mr. D’Aloisio’s help.

“I’ve still got a year and a half left at my high school,” he said in a telephone interview on Monday, but, partly to abide by the company’s new and much-debated policy that prohibits working from home, he will make arrangements to test out of his classes and work from the Yahoo office in London.

Mr. D’Aloisio declined to comment on the price paid by Yahoo (the technology-oriented Web site All Things D pegged the purchase price at about $30 million), and he described himself not as the majority owner of Summly but as its largest shareholder.

Summly’s other investors, improbably enough, included Wendi Murdoch, Ashton Kutcher and Yoko Ono. The most important one was Li Ka-shing, the Hong Kong billionaire, whose investment fund supported Mr. D’Aloisio’s idea early on, before it was even called Summly.

“They took a gamble on me when I was a 15-year-old,” Mr. D’Aloisio said, by providing seed financing that let him hire employees and lease office space.

The fund read about Mr. D’Aloisio’s early-stage app on the Silicon Valley news site TechCrunch, found his e-mail address and startled him with a message expressing interest.

The others signed up later. “Because it was my first time around, people just wanted to help,” he said.

For teenagers who fancy themselves entrepreneurs — and their parents, too — the news of the sale conjured up some feelings of inadequacy, but also awe. For Brian Wong, the 21-year-old founder of Kiip, a mobile rewards company, the reaction was downright laughable: “I feel old!”

A few years ago, Mr. Wong was described in the news media as the youngest person ever to receive venture capital funding. But a couple of younger founders came along — “and then Nick broke all of our records,” Mr. Wong said on Monday.

Among the attributes that helped Mr. D’Aloisio, he said, was a preternatural ability to articulate exactly what he wanted Summly to be. “There were no umms, no uhhs, no hesitations, no insecurities,” Mr. Wong said.

Mr. D’Aloisio, for his part, sounded somewhat uninterested in answering questions about his age on Monday. He acknowledged that it was an advantage in some pitch meetings, and certainly in the news media, “but so was the strength of the idea.” He was more eager to talk about his new employer, Yahoo, which is trying to reinvent itself as a technology company (having dropped the digital media tagline it used before Marissa Mayer became chief executive last year).

“People are kind of underestimating how powerful it’s going to become and how much opportunity is there,” he said.

For a company that badly wants to be labeled innovative, those words are worth a lot.

Mr. D’Aloisio’s father, a commodities trader, and his mother, a lawyer, had no special knowledge of technology. But they nurtured their son’s fascination with it and he started coding at age 12. Eventually he decided to develop an app with what he calls an “automatic summarization algorithm,” one that “can take pre-existing long-form content and summarize it.” In other words, it tries to solve a problem that is often summed up with the abbreviation T.L., D.R.: “too long, didn’t read.”

Summly officially came online last November. By December, Mr. D’Aloisio was talking to Yahoo and other suitors.

Yahoo said in a statement that while the Summly app would be shut down, “we will acquire the technology and you’ll see it come to life throughout Yahoo’s mobile experiences soon.”

Other news-reading and news-skimming apps made for mobile devices have attracted news media and technology company attention as of late. The social network LinkedIn was said to be pursuing an app called Pulse earlier this month. Still, the eight-figure payday for a teenage entrepreneur on Monday struck some as outlandish and set off speculation that Yahoo was willing to pay almost any price for “cool.”

Mr. D’Aloisio, though, will have a long time to prove his and his algorithm’s worth. As for the sizable paycheck from Yahoo, he said he did not have any specific plans for the sudden windfall. “It’s going to be put into a trust fund and my parents will help manage it,” he said.

He did say, however, that “angel investing could be really fun.” When not working at Yahoo, he will keep up with his hobbies — cricket in particular — and set his sights on attending college at Oxford. His intended major is philosophy.

The Internet is a surveillance state

Editor's note: Bruce Schneier is a security technologist and author of "Liars and Outliers: Enabling the Trust Society Needs to Survive."

(CNN) -- I'm going to start with three data points.

One: Some of the Chinese military hackers who were implicated in a broad set of attacks against the U.S. government and corporations were identified because they accessed Facebook from the same network infrastructure they used to carry out their attacks.

Two: Hector Monsegur, one of the leaders of the LulzSac hacker movement, was identified and arrested last year by the FBI. Although he practiced good computer security and used an anonymous relay service to protect his identity, he slipped up.

 

And three: Paula Broadwell,who had an affair with CIA director David Petraeus, similarly took extensive precautions to hide her identity. She never logged in to her anonymous e-mail service from her home network. Instead, she used hotel and other public networks when she e-mailed him. The FBI correlated hotel registration data from several different hotels -- and hers was the common name.

The Internet is a surveillance state. Whether we admit it to ourselves or not, and whether we like it or not, we're being tracked all the time. Google tracks us, both on its pages and on other pages it has access to. Facebook does the same; it even tracks non-Facebook users. Apple tracks us on our iPhones and iPads. One reporter used a tool called Collusion to track who was tracking him; 105 companies tracked his Internet use during one 36-hour period.

 

Increasingly, what we do on the Internet is being combined with other data about us. Unmasking Broadwell's identity involved correlating her Internet activity with her hotel stays. Everything we do now involves computers, and computers produce data as a natural by-product. Everything is now being saved and correlated, and many big-data companies make money by building up intimate profiles of our lives from a variety of sources.

Facebook, for example, correlates your online behavior with your purchasing habits offline. And there's more. There's location data from your cell phone, there's a record of your movements from closed-circuit TVs.

This is ubiquitous surveillance: All of us being watched, all the time, and that data being stored forever. This is what a surveillance state looks like, and it's efficient beyond the wildest dreams of George Orwell.

Sure, we can take measures to prevent this. We can limit what we search on Google from our iPhones, and instead use computer web browsers that allow us to delete cookies. We can use an alias on Facebook. We can turn our cell phones off and spend cash. But increasingly, none of it matters.

There are simply too many ways to be tracked. The Internet, e-mail, cell phones, web browsers, social networking sites, search engines: these have become necessities, and it's fanciful to expect people to simply refuse to use them just because they don't like the spying, especially since the full extent of such spying is deliberately hidden from us and there are few alternatives being marketed by companies that don't spy.

This isn't something the free market can fix. We consumers have no choice in the matter. All the major companies that provide us with Internet services are interested in tracking us. Visit a website and it will almost certainly know who you are; there are lots of ways to be tracked without cookies. Cellphone companies routinely undo the web's privacy protection. One experiment at Carnegie Mellon took real-time videos of students on campus and was able to identify one-third of them by comparing their photos with publicly available tagged Facebook photos.

Maintaining privacy on the Internet is nearly impossible. If you forget even once to enable your protections, or click on the wrong link, or type the wrong thing, and you've permanently attached your name to whatever anonymous service you're using. Monsegur slipped up once, and the FBI got him. If the director of the CIA can't maintain his privacy on the Internet, we've got no hope.

In today's world, governments and corporations are working together to keep things that way. Governments are happy to use the data corporations collect -- occasionally demanding that they collect more and save it longer -- to spy on us. And corporations are happy to buy data from governments. Together the powerful spy on the powerless, and they're not going to give up their positions of power, despite what the people want.

Fixing this requires strong government will, but they're just as punch-drunk on data as the corporations. Slap-on-the-wrist fines notwithstanding, no one is agitating for better privacy laws.

So, we're done. Welcome to a world where Google knows exactly what sort of porn you all like, and more about your interests than your spouse does. Welcome to a world where your cell phone company knows exactly where you are all the time. Welcome to the end of private conversations, because increasingly your conversations are conducted by e-mail, text, or social networking sites.

And welcome to a world where all of this, and everything else that you do or is done on a computer, is saved, correlated, studied, passed around from company to company without your knowledge or consent; and where the government accesses it at will without a warrant.

Welcome to an Internet without privacy, and we've ended up here with hardly a fight.

Are you in or out?

Are you in or out?Bloomberg is reporting that Samsung is planning on using quad-core processors from QUALCOMM, Inc. (NASDAQ:QCOM) as well as Exynos "octa-core" chips of its own designs.

There's been much debate over what type of processor Samsung would use, since it was reportedly running into some problems with the Exynos 5 Octa related to power efficiency. Packing eight cores onto one chip comes at quite an energy cost, after all.

In and outAccording to Bloomberg's sources, the company will hedge its bets by using both chips. A Snapdragon will power the U.S. version of the Galaxy S IV, while an Exynos processor will be found in the international variants. Samsung has used this strategy before, including with its outgoing flagship Galaxy S III. From time to time, OEMs tailor devices to different geographical target markets.

For example, since the U.S. is the farthest along with the transition to 4G LTE, supporting LTE connectivity is critical for any high-end smartphone that has hopes of U.S. success. In most other parts of the world, 4G LTE networks are either inchoate or nonexistent. Many OEMs typically tap QUALCOMM, Inc. (NASDAQ:QCOM) for Snapdragon processors with integrated LTE for U.S. models. HTC's 2012 flagship used a Snapdragon in the U.S. and an NVIDIA Corporation (NASDAQ:NVDA) Tegra in the international version, as well. NVIDIA just announced its first integrated LTE chipset, the Tegra 4i, which may put some heat on QUALCOMM, Inc. (NASDAQ:QCOM) in the smartphone ring.

Here’s Where They Make China’s Cheap Android

A little over a year ago, 38-year-old entrepreneur Liang Liwan wasn’t making smartphones at all. This year, he expects to build 10 million of them.
Liang’s company, Xunrui Communications, buys smartphone components and then feeds them to several small factories around Shenzhen, in southern China. There, deft-fingered workers assemble the parts into basic smartphones that retail for as little as $65.
Manufacturers built about 700 million smartphones last year. But the market has taken on a barbell shape. On one side are familiar names like Apple and Samsung, selling pricey phones for $300 to $600; on the other, several hundred lesser-known Chinese brands supplied by a thousand or more small factories.
The change began in 2011, when computer-chip makers began selling off-the-shelf chipsets—the set of processors that are the brains of a touch-screen phone. Those, plus Google’s free Android operating system, made smartphones much easier to produce.
The flood of inexpensive devices could hurt struggling phone makers like Nokia and might also force Samsung and Apple to offer cheaper models. “They have reached their peak,” Liang said during an interview near his office in Shenzhen, which has become a hub for electronics makers. “In [manufacturing] technique we are close to the same level. Then the only difference will be the cost and the brand.”
Larger Chinese companies, like Lenovo and Huawei, have also swarmed into China’s market with midrange phones that cost closer to $200. Lenovo captured 12 percent of China’s market last year.

Cheap phones: Workers assemble $65 smartphones at Guo Wei Global Electronics, one of hundreds of small Chinese factories now building mobile computers.

Liang’s phones are the ultracheap kind. He builds them at several Shenzhen factories, like Shenzhen Guo Wei Global Electronics, a nondescript building that opened in 1991 as a manufacturer of fixed-line phones and audio equipment. At Guo Wei, young Xunrui engineers lounge about, smoking cigarettes and drinking warm Coca-Cola while playing games on various brands of laptops.
One floor up, past a metal detector and an enclosure where high-pressured air blows dust and other impurities off workers’ blue smocks, are the production lines—five of them, each with 35 young workers able to solder together and box up 3,000 smartphones a day.
Guo Wei has had to make some investments to get into the smartphone game, including importing new solder inspection equipment from Korea. One production line costs around $1.6 million to set up, according to Li Li, a production manager at the factory who showed off the equipment.
“The techniques are very complicated compared to older phones,” says Li, who joined the factory 17 years ago to work in a department that repaired fixed-line telephones.
But the real reason for the switchover to smartphones was that last year large chip makers, including the Taiwan-based MediaTek and Spreadtrum, started offering “turn-key” systems: phone designs plus a set of chips with Android and other software preloaded. Spreadtrum says it may sell 100 million units this year.
Each chipset costs $5 to $10, depending on the size of a phone’s screen and other features. In total, Liang says, his cost to make a smartphone is about $40. He says he can manufacture as many as 30,000 smartphones a day for brands such as Konka Mobile and for telecom operators like China Unicom.
In the United States, a smartphone’s high cost is generally masked by wireless companies, which discount them steeply if consumers agree to a contract. In China that happens as well. Liang says his phones retail for about $65 or $70 but can cost only $35 with a contract.

That is making China, now the world’s largest smartphone market, a challenging place for foreign firms to compete. Apple accounts for 38 percent of U.S. smartphone sales, but its share in China is 11 percent and falling. Google has even bigger problems making money. Even though the devices use Android, they often don’t come with Google’s apps and search tool installed (see “Android Takes Off in China, But Google Has Little to Show for It”).
Liang says his aim is to make smartphones that are affordable, even if they aren’t yet as good as an iPhone. That means the camera and LCD screen might not be the best, and the battery life could be shorter. “I always use this word ‘acceptable,’” he says. “A lot of users only need an acceptable product. They don’t need a perfect product.”
What’s certain, Liang says, is that the quality of the phones his factories produce will rise. “There is no profit at the bottom,” he says. “Everyone is trying to improve their techniques.”
Su Dongxia assisted with interpreting and research.