The company Apple-Samsung can't hurt

August 31, 2012: 9:22 AM ET

Qualcomm settled its patent disputes years ago. Now, it's looking for a surge in growth from the mobile sector.

FORTUNE -- While much of the mobile industry is still reeling from last week's Apple-Samsung verdict, at least one wireless giant—Qualcomm—is confident the outcome won't hurt its business. The San Diego-based company's chips are found in hundreds of different smartphone models, and as long as the industry as a whole continues to grow, Qualcomm (QCOM) will keep growing too. Of course, the wireless chipmaker is no stranger to its own patent infringement lawsuits (which is probably why it's happy to watch this one unfold from the sidelines). Qualcomm resolved its long-standing legal battle with Nokia (NOK) back in 2008, and now the two companies have a tight partnership -- in fact, Qualcomm powers all Microsoft (MSFT) Windows Phone smartphones, including Nokia's Lumia line of devices. Its chips are also found in many Google (GOOG) Android smartphones and some Apple (AAPL) products. We caught up with Qualcomm CEO Paul Jacobs to get his take on last week's monumental verdict, upcoming Windows 8 devices and how he plans to get consumers psyched about the chips inside their smartphone.

FORTUNE: What implications does the Apple-Samsung verdict have for upcoming Windows 8 phones, and for you?

Jacobs: I don't want to get too much into the legal issues, but we've been through a few of these things in the past. When I took over in 2005 we got sued by a whole bunch of people all at once, including Nokia, who are now friends of ours. What happens is there's a big appeals process that always plays out so first that has to happen. But from our point of view it doesn't look like there's much impact on the chip business. This is mostly about older phones, not newer products. Of course we help our partners out, and we definitely want to see the industry not be so litigious and move forward. In terms of its impact on Windows 8, that's really hard for me to tell.

Describe the relationship you have today with Nokia. You get along now?

Jacobs: We signed a deal with them in 2008 so that's in the past. We work really closely with them on the product design side. We help them bring new phones out. In the beginning it was a brand new relationship but it really accelerated after Stephen [Elop, CEO of Nokia] came in and decided to go full force on Windows Phone. They have a facility in San Diego and we work with those guys and people in Finland really closely. It's a very good relationship and very friendly. We are on all the Lumia phones -- all of the Windows phones are Qualcomm-based. That's because when Microsoft did Windows Phone they made a reference hardware design and said that this is the hardware it will be optimized for.

What about Intel? They've made a few announcements in the mobile space -- what do you think of their efforts?

Jacobs: What they've done so far is really just dipped their toes in the water. They worked with a few companies and funded some designs. They brought them out to the market and they really didn't sell very well. They'll keep bringing out the next chip and the next chip. The big thing they're talking about now is having a manufacturing advantage. When Intel's making these statements they're looking at it like the industry will stay in the same space and they'll get the lead, but that's not the way it will play out. ARM [a competing mobile chip architecture, used by Qualcomm] is more efficient. We've always had a transistor disadvantage so to speak but the whole system together has a power advantage. So I think that will continue.

Given that there are so many other competitors that license from ARM how do you differentiate and work with your manufacturers to help them differentiate?

Jacobs: We license the instruction set from ARM but we actually design the microprocessor ourselves. What that allows us to do is get a jump on the other companies. We're ahead on what ARM's doing because we're so focused on mobile.

Do you care if consumers who are buying these smartphones know that there's a Qualcomm chip inside?

Jacobs: I think it will matter more in the future. What you want is for them to know is that if they buy a Snapdragon [Qualcomm's line of smartphone processors] it's going to have better performance, better power consumption and more integration of functionality. All these attributes that we're trying to cram into a chip, we need some way of creating an emotional connection to people. And so we're in the process of going through that work and we recently hired a new chief marketing officer [the new exec is the former head of Intel's mobile group, Anand Chandrasekher].

So will we see "Qualcomm Inside" campaigns soon?

Jacobs: Not "Qualcomm Inside." We'll have our own thing. We're so much an engineering company so it's hard for us to spend the money on marketing. But it's already happened a lot overseas. In many of the emerging markets, people really want to have the Qualcomm brand.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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