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What inspires us?




       Annual Report 2006
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




QUALCOMM is proud to be a leader in the communications revolution.
For more than two decades now, we’ve been innovating with new ideas and
executing on our vision. Together with our many partners, we are growing
a vital and competitive industry that includes equipment manufacturers,
network operators, applications developers and content publishers.

Our wireless technologies are making a meaningful difference in the
lives of people everywhere. Our goal is connectivity to the people and
data that matter most. By making a positive impact on everyday life,
we’re part of an industry that is literally changing the world…
for the better.




table of contents
                         01
Letter to Stockholders
                         03
Financial Highlights
                         06
QUALCOMM Technology
                         12
Global Growth
                         18
Business Units
                         30
QUALCOMM Culture
                         33
Financial Information
Making a difference
in everyday life.



        south korea
        Realtime Healthcare
        for Diabetes Patients
        The “diabetes phone” uses a BREW®
        application and wireless technology
        to report glucose levels to medical
        teams, enabling realtime consultation
        and care. Blood test data is stored
        on the phone and sent via Short
        Message Service (SMS) up to five
        times a day to the healthcare provider,
        parent or guardian.
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




Martin Kropat
product manager,
qualcomm internet services
“People are always looking for new
 ways to use their mobile phones.
 Every day I help developers turn
 ideas into new applications.”
Making a difference
                                                  in everyday life.




north america
Bones in Motion
(A Personal Fitness Program)
Taking advantage of location-based services that are made possible
by QUALCOMM’s BREW and gpsOne® solutions, the company Bones
in Motion has created a wireless subscription service called BiM
Active that enables people to use their mobile devices to record
running routes, distances and calories burned to help them achieve
personal fitness goals.
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




                                  Shawn Covell
                                  senior director, qualcomm
                                  international government affairs
                                  “QUALCOMM’s Wireless Reach™
                                   initiative is helping people
                                   around the globe to improve
                                   their lives with 3G. Being a part
                                   of Wireless Reach and seeing
                                   the positive impact of wireless
                                   technology—that’s when my
                                   job ceases to be work.”
Making a difference
                                            in everyday life.




china
Enabling Rural Innovation
As part of the global Wireless Reach
initiative, QUALCOMM and its partners
in China are delivering free wireless
phones and service vouchers to
disadvantaged groups in underserved
rural areas of China. Working with PlaNet
Finance (a nongovernmental organization)
and wireless operator China Unicom,
the goal is to introduce the benefits of
mobile communications to microfinance
workers and loan recipients, promoting
entrepreneurship and economic and
social development.
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




Eddie Choy
senior staff engineer /manager,
qualcomm cdma technologies
“It simply makes sense to combine
 portable music players and mobile
 handsets. And it’s rewarding to
 know that we’re enhancing the music
 listening experience for millions
 of mobile users.”
Making a difference
                                                        in everyday life.



japan
300 Million Music Downloads
Downloading mobile music is enormously popular
in Japan. Approximately four million full-length
songs are now being downloaded per month on
KDDI’s BREW application, Chaku Uta Full. Since
the initial launch of the music service in late 2002,
customers have purchased more than 300 million
downloads, including song clips, ringtones and
full-length songs.
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




David Van Driel
senior manager, business development,
qualcomm wireless business solutions
“It’s exciting to have the opportunity
 to unite two dynamic companies for
 a common purpose. That alignment
 enables us to better serve our
 customers.”
Making a difference
in everyday life.



       north america
       Managing Construction
       and Forestry Equipment
       QUALCOMM Wireless Business Solutions®
       formed an alliance this year with John
       Deere Construction & Forestry Company
       to create a monitoring and information
       delivery system that leverages our
       GlobalTRACS® equipment management
       system, providing vital information
       about equipment location, machine
       health and service status.
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




Uma Chilakapati
engineer, qualcomm cdma technologies
“The chipsets we create bring wireless data to life.
 It’s the challenge of creating quality designs…
 the problems to be overcome…and the insights
 to be gained. That’s what motivates me to come
 to work every day.”
Making a difference
                                                  in everyday life.




india
Online Stock Alerts for Portfolio Trackers
In 1996, Tata Teleservices was the first to launch CDMA-based mobile
services in India. Today, operating under the brand name Tata Indicom,
the company offers a broad range of services, including BSE (Bombay
Stock Exchange) Portfolio Tracker. Enabled by QUALCOMM’s BREW
solution, this popular stock portfolio application enables consumers
to monitor stocks and track their portfolio on the go.
Wireless communications technology is fundamentally
changing and improving people’s lives worldwide.




                                             Dr. Paul E. Jacobs, CEO (left)
                                             Steven R. Altman, President (right)
Making a difference
                                        in everyday life.



To Our Stockholders:

The technology we are enabling continues to have a growing and positive
impact on people’s lives around the world.

               focus and dedication
               Fiscal 2006 was the first full year following the transition to our new management team. It was
               a year in which a small number of competitors sought to challenge us, not in the marketplace, but
               in courts and regulatory arenas. We will meet these challenges with the highest level of energy
               and integrity while remaining dedicated to the execution of our business model. Our employees
               developed new technologies and defined new business models that generated new opportunities
               for a wider range of partners across multiple industries. Consumers adopted our third-generation
               (3G) technologies at an accelerating pace both in mature and developing markets. And it was a year
               in which we returned the strongest financial performance in our history.

               enabling progress and growth
               Our business model stimulates a healthy and competitive worldwide wireless marketplace. Our
               inventions enable new revenue streams for us and for our partners—manufacturers, operators,
               content providers and developers—enabling continuing investments throughout the wireless value
               chain. Our focus on effective execution and rewarding partnerships has positioned us for continued
               growth and leadership in the rapidly advancing global wireless industry.

               Looking ahead, we believe that, increasingly, the evolution in wireless will be less about competing
               technologies and more about complementary technologies—working together to provide manufac-
               turers and operators the richest set of choices on which to profitably build their businesses, and
               providing users with ever more compelling wireless applications and services. Our strategy is to
               continue supporting a broad range of technology and software platforms. To that end, our solutions
               and intellectual property portfolio now integrate multiple radio technologies, support for multiple
               spectrum bands and an extensive array of data and multimedia capabilities—all designed to speed
               the introduction by our partners of compelling new services and groundbreaking wireless devices.

               Among the trends we are seeing in the wireless industry are ubiquitous and inexpensive mobile
               voice, even higher data speeds and an increasingly extensive set of data services—all seamlessly


                                                                                               qualcomm 2006 0
integrated in an ever-increasing array of innovative devices. Wireless devices now combine the
                   versatility and capability of a personal computer with true mobility. Enabled by today’s high-speed
                   networks, the mobile phone is becoming a multi-functional device that supports a myriad of
                   applications, including voice, data, multimedia and GPS location-based services, using a variety
                   of wireless networks simultaneously.

                   strong demand for technology
                   Among the growth drivers for our business this year is the increasing demand for our chipsets—
                   semiconductors and system software. In emerging markets like China and India, demand for
                   inexpensive devices based on 3G technology is increasing. In more established markets like
                   North America, South Korea, Japan and Europe, consumers and enterprises continue to upgrade
                   to feature-rich 3G CDMA devices and services.

                   Global demand for 3G wireless surged this year and QUALCOMM technology continues to be the
                   key driver with industry-leading solutions targeting all addressable markets. As of November
                   2006, there were more than 410 million subscribers to QUALCOMM-enabled wireless networks,
                   including approximately 320 million subscribers to networks based on CDMA2000,® the first 3G
                   solution deployed anywhere in the world.

                   As second-generation (2G) networks make the transition to advanced wireless systems, the
                   WCDMA (UMTS) market is gaining impressive momentum, presenting an additional opportunity
                   for us. As of November 2006, there were more than 90 million WCDMA subscribers worldwide.

                   As we look to future technology deployments, our expertise and continued innovation in CDMA
                   technology have brought us to a leading position in both CDMA2000 and WCDMA next-generation
                   innovations. The high-speed version of CDMA2000, 1xEV-DO, is now available on 44 networks in
                   29 countries. For our WCDMA customers, we were first-to-market with the enhanced WCDMA next
                   generation solution called High Speed Downlink Packet Access (HSDPA), and we are pleased that
                   our chipset customers have been the first device manufacturers to support HSDPA launches.


Each QUALCOMM operating unit plays a key role in innovating and
supporting wireless solutions that enable the wireless industry.

                   The Telecommunications Industry Association adopted our FLO™ technology this year as a
                   standard for mobile TV. More than 70 leading companies from around the world have now joined
                   the FLO Forum, the association of wireless industry leaders which drove the FLO standardization
                   effort. Mobile television may very well be the next “killer” application on the cell phone and we are
                   excited to see how consumers react to the commercial introduction of MediaFLO™ in 2007 in the
                   United States.


02 qualcomm 2006
We achieved record results
                                                                                     in fiscal 2006.



revenue and gross margin                                                  research and development *                  diluted earnings
                                                                      *
                                                            (1) (2)


                                                                                                                      per share (gaap)                   *
($ in billions)                                                           ($ in billions)                                                      (2) (3)




                               33%                                                          52%                                         14%
                               increase from 2005                                           increase from 2005                          increase from 2005
                   71%




                               $7.53	 2006                                                  $1.54	 2006                                 $1.44	 2006
                               $5.67 2005                                                   $1.01 2005                                  $1.26 2005
            71%




                               $4.88 2004                                                   $0.72 2004                                  $1.03 2004
         70%




                               $3.85 2003                                                   $0.52 2003                                  $0.51 2003
   67%




                               $2.92 2002                                                   $0.45 2002                                  $0.22 2002
67%




                                                                                      20%
                                                                             18%
                                                                           15%
                                                                          14%
                                                                          15%




 2002-2006                                                                2002-2006                                   2002-2006

% = Gross Margin                                                          % = Percentage of Revenue



pro forma diluted                                                         cash, cash equivalents and                  free cash flow                       **
                                                                                                                                             (4) (5) (6)


earnings per share                                                        marketable securities
                                                       **                                                             ($ in billions)
                                             (2) (3)


                                                                          ($ in billions)


                               41%                                                          15%                                         22%
                                                                                            increase from 2005
                               increase from 2005                                                                                       increase from 2005


                                                                                            $9.95	 2006
                               $1.64	 2006                                                                                              $2.57	 2006
                                                                                            $8.68 2005
                               $1.16 2005                                                                                               $2.11 2005
                                                                                            $7.64 2004
                               $1.07 2004                                                                                               $2.14 2004
                                                                                            $5.37 2003
                               $0.71 2003                                                                                               $1.55 2003
                                                                                            $3.20 2002
                               $0.48 2002                                                                                               $0.97 2002




 2002-2006                                                                2002-2006                                   2002-2006

                          See notes on page 81.
(1) (2) (3) (4) (5) (6)


* Fiscal 2006 results presented reflect the impact of share based compensation related to our adoption of FAS 123R.
  Further details are located in our Notes to Consolidated Financial Statements beginning on page 59.

                                                                                                                                           qualcomm 2006 0
** See reconciliation to GAAP amounts on page 80.
“Our strong cash flows enable us to continue to invest in developing
 new technologies through research and development while returning
 capital to our stockholders through dividends and share repurchases.”
 william e. keitel, executive vice president and chief financial officer




 Returning Capital to Stockholders
                                                                               quarterly cash dividend per common share
 share repurchase program
                                                                               (Based on Date Payable)

                                                                                                                                             $.120
                                      $1.5 B *

                                                                                                                                       $.090
                                                                                                                        $.090

                                                                                                    $.070          $.070
                    $1.0 B

                                                                                                 $.050
                                                                                  $.035        $.035
                                                                              $.025


 $160 M
                                                                               mar




                                                                                                   mar




                                                                                                                     mar




                                                                                                                                          mar
                                                                               dec
                                                                               jun




                                                                                                   jun




                                                                                                                     jun




                                                                                                                                          jun
                                                                                                                     jan




                                                                                                                                          jan
                                                                               sep




                                                                                                   sep




                                                                                                                     sep




                                                                                                                                          sep
 FY 2003            FY 2005           FY 2006                                     2003               2004               2005                 2006


* Gross repurchases. Authorized $2.5 billion on November 7, 2005,               Note: The Company affected a two-for-one stock split in August 2004.
  no expiration date. As of November 2, 2006, $0.9 billion remained             All references to per share data have been adjusted to reflect the
  authorized for repurchase.                                                    stock split.




 Key Honors
 Our Company is proud to be recognized for our successful business model
 and the quality of our people, including the following prestigious honors:



 Eight years in a row on FORTUNE’s list of
                   “100 Best Companies to Work For in America”

 FORTUNE’s list of                          Fabless Semiconductor     Forbes Platinum List                      Financial Times
                                            Association’s
“Most Admired                                                         “The Best                                “List of Most Valuable
                                           “Best Financially
 Companies”                                                            Big Companies”                           Global Companies”
                                            Managed Company”



 0 qualcomm 2006
  qualcomm 2006
focused business operations and strong results
               To ensure long-term growth for our company and industry, we aggressively invest in research and
               development (RD). In fiscal 2006 we invested approximately $1.5 billion in RD aimed at enhancing
               the wireless user experience and enabling exciting new services for consumers and enterprises.
               Our RD efforts have provided us with an industry-leading intellectual property portfolio that is
               made available to equipment and device manufacturers worldwide.

               In fiscal 2006, we achieved another year of record revenue, generating $7.53 billion, up 33 percent
               year-over-year. Through our ongoing focus on operations, our earnings have again increased. In
               fiscal 2006 we reported net income of $2.47 billion, up 15 percent year-over-year, and diluted
               earnings per share of $1.44, up 14 percent year-over-year. Operating cash flow was $3.25 billion in
               fiscal 2006, up 21 percent year-over-year and represented approximately 43 percent of revenue.

               Our balance sheet strength and pro-competitive business model provide us with significant
               financial flexibility, allowing us to pursue strategic growth objectives, pay dividends and repurchase
               shares in our ongoing effort to enhance stockholder value. Building on this commitment in fiscal
               2006, we paid cash dividends totaling approximately $698 million and repurchased 34 million
               shares of our common stock for approximately $1.49 billion, net of related premiums received.
               Our total cash and marketable securities balance grew to $9.95 billion at the end of fiscal 2006,
               an increase of 15 percent year-over-year.


We are enabling the next evolution in wireless.
               continued growth and leadership
               There are significant opportunities ahead for us as more people make advanced wireless technology
               part of their daily lives. The large-scale migration from 2G GSM to 3G CDMA is progressing through-
               out the world and market forecasts anticipate considerable increases in device sales with high-speed
               data capability. This inevitable worldwide migration to 3G is a significant opportunity for QUALCOMM
               and our partners in the wireless value chain.

               On behalf of the executive team, we’d like to thank QUALCOMM’s employees and partners world-
               wide for their outstanding performance this year. With their help, and with support from our
               investors, we will continue to innovate and invest in the future of wireless.




               Dr. Paul E. Jacobs                              Steven R. Altman
               Chief Executive Officer                         President


                                                                                                 qualcomm 2006 0
QUALCOMM Technology




06 qualcomm 2006
6 qualcomm 2006
QUALCOMM continues its role as the
leading enabler of the wireless value chain.

advanced wireless technologies                     on helping the CDMA2000 community achieve




                                                                                                                        qualcomm technology
The increasingly widespread availability and       its goals for the wireless future. HMMX is
demand for wireline and wireless broadband         designed to serve the WCDMA community.
is driving a convergence of capabilities in        Together, these roadmaps support our vision
computing devices, including smart phones,         for a world where devices can simultaneously
laptop computers and personal media players.       link with multiple networks and protocols,
We continue to drive down cost and power           ensuring the optimal solution in any given
consumption, yet increase functionality and        situation. In other words, these evolving
processing power of our chipset solutions,         platforms enable “smart” connections so the
thereby enabling a broader market for              right technology is used for the right service.
wireless broadband.
                                                   There are now more than 70 laptop
Through our robust technology roadmaps, we
                                                   models in design, or commercially
are providing a wide range of choices to our
                                                   available, that feature embedded
industry partners and helping drive the advance-
                                                   mobile broadband connectivity,
ment of mobile broadband, rich multimedia
                                                   based on a QUALCOMM chipset
services, location-enhanced applications and
embedded wireless technology.                      (either EV-DO or HSDPA).
paving the way for the
                                                   Whether in the CDMA2000 community or in
next generation
                                                   the WCDMA community, the goal is the same.
DO Multicarrier Multilink eXtensions (DMMX)
                                                   We’re matching the optimal airlink with the
and HSDPA Multicarrier Multilink eXtensions
                                                   appropriate application. And we’re driving
(HMMX) are the terms used to describe
                                                   the convergence of high-speed wireless and
QUALCOMM’s dual-path technology roadmap
                                                   personal electronics into multi-use mobile
to the year 2010 and beyond. DMMX focuses
                                                   devices…through the next decade and beyond.




Opposite page: This QUALCOMM engineer
is evaluating the antenna component of new
chipset reference designs to ensure the
most optimal over-the-air performance.




                                                                                                     qualcomm 2006 0
QUALCOMM Offers Complete Technology
Roadmaps for the Future



EV-DO/UMB Mobile Broadband Evolution
Commercialized in 2006                                                Expected commercialization: 2008

EV-DO Rev. A                                                          EV-DO Rev. B
Building on EV-DO Rel. 0, EV-DO Rev. A adds support for broad-        EV-DO Rev. B enables operators to aggregate multiple EV-DO
band data rates and increased capacity in the uplink as well as       Rev. A radio frequency (RF) channels to improve user experi-
support for advanced realtime services such as high perfor-           ence by offering increased capacity and higher data rates and
mance VoIP, push-to-talk, video telephony and low-delay gaming.       lower delay.


Commercialized in 2006                                                                             Expected commercialization: 2009

FLASH-OFDM (Pre-UMB)                                                  Ultra Mobile Broadband (UMB)
A mobile OFDMA implementation for high-speed wireless                 A highly optimized OFDMA system built from the ground up for
data, delivering broadband data rates on the downlink and             mobility, and supporting advanced techniques such as MIMO.
uplinks, as well as support for realtime services such as VoIP.       UMB is well-suited for areas with high data traffic in which wider
                                                                      bandwidths in new or vacant spectrum are available. UMB will
                                                                      coexist with existing Rev. A and Rev. B network deployments.




WCDMA/LTE Mobile Broadband Evolution
Commercialized in 2005                         Expected commercialization: 2007               Expected commercialization: 2008

HSDPA (Rel. 5)                                 HSUPA (Rel. 6)                                 HSPA+ (Rel. 7  Rel. 8)
Similar to EV-DO Rel. 0, HSDPA offers broad-   Similar to EV-DO Rev. A, HSUPA adds            HSPA+ makes improvements over HSUPA
band downloads and is now being deployed       support for broadband data rates and           to increase system performance in
worldwide. This upgrade to WCDMA Rel. 99       increased capacity in the uplink as well       existing 5 MHz deployments. Improve-
provides broadband data rates and              as support for advanced realtime               ments include higher data rates and
increased capacity in the downlink, signi-     services such as high performance              increased capacity with advanced
ficantly improving end-user experience         VoIP, push-to-talk, packet video               techniques such as MIMO, as well as
on existing applications such as video-        telephony and low-delay gaming.                enhancements to system capacity for
on-demand, web browsing and email.                                                            realtime services such as VoIP.


                                                                                                  Expected commercialization: 2010+

LTE
An optimized OFDMA system designed to provide high performance in a mobile environment, including advanced techniques such as
MIMO. LTE is well-suited for areas with high data traffic in which wider bandwidths in new or vacant spectrum are available. LTE will
coexist with existing HSPA and HSPA+ network deployments.



0 qualcomm 2006
 qualcomm 2006
Our solutions enable
                                                  advanced applications.



driving the discovery and delivery                transforming multimedia delivery




                                                                                                              qualcomm technology
of data services                                  QUALCOMM also created the MediaFLO
Today’s consumers have access to an exciting      System, an end-to-end broadcasting system
array of wireless capabilities, thanks to the     for high-quality video streams, audio-only
increasing availability of high-speed EV-DO       streams, Clipcast™ media and IP datacasting
and HSDPA data networks. A key part of            to mobile handsets.
this success formula is the BREW solution for
wireless data applications and services.          Based on the standardized FLO technology,
                                                  the MediaFLO System is designed to optimize
Operators, handset manufacturers, media           coverage and capacity while delivering the most
companies, application publishers and devel-      compelling user experience. The MediaFLO
opers—all are using BREW to offer feature-rich,   solution provides the most efficient delivery
value-added products and services, ultimately     of streaming news, information and entertain-
enriching the user experience and making wire-    ment and is the foundation of the nationwide
less data meaningful for consumers. BREW          mobile multicast network operated by
customers can benefit from comprehensive          QUALCOMM’s wholly-owned subsidiary
and targeted BREW Signature Solutions that        MediaFLO USA, Inc.
enable reduced time-to-market and capital
investment for companies providing mobile         Engineered specifically for the mobile
products and services.                            environment, MediaFLO’s technology-based
                                                  multimedia multicasting will complement
BREW customers can also benefit from              wireless operators’ cellular voice and data
several modular BREW offerings:                   services, delivering content to cellular
                                                  handsets used on their existing data-enabled
uiOne™ for rich, integrated and dynamic user      3G networks.
experiences with fast access to a variety of
services on wireless devices.
deliveryOne™ for differentiated and tightly
                                                  BREW and MediaFLO are QUALCOMM innovations that
integrated, operator-managed support and
delivery of advanced wireless data content        help wireless operators differentiate their services with
and services.
                                                  premium content.
QPoint™ location server that enables location-
based services (LBS).
Bringing a new generation of
             services to the wireless user.



                                       solutions for cdma2000/ev-do                                    solutions for wcdma/hsdpa
                                       networks                                                        networks
                                       Approximately 588 devices are now in design                     More than 27 equipment manufacturers are
                                       or commercially launched based on EV-DO.                        now designing or offering WCDMA devices.
                                       Five manufacturers are now designing devices                    A cumulative total of more than 423 WCDMA
                                       with the first generation of QUALCOMM                           device models have now launched.
                                       Single Chip™ (QSC™) solutions, which integrate                  We supported the world’s first large HSDPA
                                       multiple components for slimmer, less                           launch (by Cingular Wireless in the U.S.).
                                       expensive handsets.                                             QCT enables the world’s first commercially
                                       We sampled the MSM6800™ chipset, the first                      available HSDPA devices.
                                       to support EV-DO Rev. A, and QUALCOMM’s                         Further enhancements of the roadmap will
                                       first sampled chipset based on 65-nanometer                     be delivered with HSPA+ and Long-Term
                                       process technology.                                             Evolution (LTE).
                                       The first EV-DO Rev. A network was commer-
                                       cialized in October of 2006 with many more
                                       planned for early 2007.
                                       Further enhancements of the roadmap will be
                                       delivered with EV-DO Rev. B and Ultra Mobile
                                       Broadband (UMB).




             Our Acquisitions and Investments Enable Additional Advancements
             airgo networks        berkana                  elata                      flarion                   iridigm display     mediaflo usa
investment




                                   wireless                                            technologies              corporation
             Advanced                                       A unified                                                                A nationwide
                                   Advanced                                                                      Affordable, low-
                                                                                       OFDMA
             Wireless Local                                 multimedia                                                               multicast network
                                   semiconductor                                       technology                power displays
             Area Network                                   content delivery                                                         and services
                                   technology 1                                                                  for tomorrow’s
             (WLAN technology)                              platform                                                                 operator
                                                                                                                 wireless devices

             Enhanced connec-      Increased                Strengthened               Greater                   A new division,     Lower cost video
             tivity integrated     integration, lower       content manage-            expertise and                                 and multimedia
                                                                                                                 QUALCOMM
             into our chipsets     cost and faster          ment capabilities          intellectual              MEMS2 Technology,   content delivered
benefit




             helps drive down      time-to-market           via QUALCOMM’s             property rights           focused on          simultaneously to
             costs and increases   for QUALCOMM             deliveryOne                (IPR) in OFDMA,           enhanced user       large audiences in
             capabilities for      chipset solutions        offering                   an enabler of             experiences         the U.S.
             new devices                                                               next-generation           and extended
                                                                                       wireless services         battery life

                                                            Featuring complementary metal oxide semiconductor (CMOS)
                                                        1

                                                            radio frequency integrated circuits (RFICs)
             0 qualcomm 2006                               micro-electro-mechanical systems
                                                        2
making a difference in the u.s. navy:
                                      mission-critical technology
                                      Whether in peacetime or time of war, the modern U.S. Navy depends on secure
                                      and reliable communications to fulfill its vital global mission. To modernize
                                      communications for its unique mobile workforce, the Navy chose 3G wireless
                                      connectivity. Now serving more than 700,000 U.S. Navy and Marine personnel,
                                      the system represents the world’s largest and most secure intranet. Notes
                                      Admiral James Godwin, “A 3G mobile wireless connection makes our work-
                                      force truly mobile and generates a lot of savings along the way.”
                                      *The QUALCOMM-sponsored 3G A-List™ awards program honors innovative and successful
3g a-list * winner: the navy           commercially deployed enterprise wireless data solutions based on 3G technology.




                                                                                                                                          qualcomm technology
qualphone            rf micro          snaptrack                  spike                     techsoft                   trigenix
                     devices (rfmd)                               technologies                                         technology
                                       Position location                                    Application
IP-based
                     BlueTooth®                                   Advanced                                             User interface
embedded client                        and E911 services                                    software for
                     connectivity                                 (90 nanometer)                                       customization
software solutions                                                                          wireless devices
                     technology                                   wafer technology
for mobile devices                                                                          in Asian markets


                                                                  Cost savings
Accelerated          Enhancements                                                           Advanced                   Enhanced user
                                       QUALCOMM’s
delivery of multi-   to our chipset    gpsOne and                                           wireless services          experiences via
                                                                  and smaller
media-capable,       solutions help    QPoint positioning                                   in key emerging
                                                                  form factors                                         QUALCOMM’s
feature-rich         manufacturers     solutions have                                       markets                    uiOne offering
                                                                  to make device
wireless chipset     decrease time-    enabled a total            manufacturers
solutions            to-market with    of more than 200           more competitive
                     compelling        million wireless
                     new devices       devices



                                                                                                                       qualcomm 2006
Global Growth




2 qualcomm 2006
Global demand for wireless spells
opportunity for all.

market trends                                         The India market had another strong year,




                                                                                                                                    global growth
The WCDMA market is growing around the                thanks in part to QUALCOMM’s market-
world. In Western Europe, net subscriber addi-        leading efforts to drive down handset costs.
tions are moving rapidly to WCDMA and in the          CDMA2000 is changing this landscape by
June 2006 quarter, WCDMA constituted an               offering revenue-generating data services in
estimated 41 percent of the handset shipments         sub-$50 handsets. As evidence of our progress
and 62 percent of the handset revenue.1 This          on this front, CDMA devices accounted for an
was also the first quarter in which the overall       estimated 53 percent of all handsets in the
volume of estimated WCDMA handset revenue             sub-$50 tier, in the first half 2006.2
surpassed that of GSM in Western Europe.
                                                      In China, the world’s largest wireless market,
BREW is also gaining traction in WCDMA                seven wireless equipment manufacturers are
markets. In the United Kingdom, O2 announced          now QUALCOMM WCDMA chipset customers.
the first launch of uiOne on their ICE phone,
which gives users the ability to download and         In India and China, users with low-end
reconfigure the user interface. And this year
                                                      devices are taking advantage of 3G
Telecom Italia Mobile (TIM) in Italy and Zapp
                                                      data services, leading to increased
Mobile in Romania were the first European
                                                      operator revenues.
wireless operators to announce deployments
of the full BREW system.
                                                      Based on estimates from Strategy Analytics, Yankee Group
                                                  1

                                                      and QUALCOMM.
                                                      Yankee Q2, 2006 India Handset Analysis report.
                                                  2




                                                                                                                 qualcomm 2006
Use of wireless data comes of age.




                                                                                              markets embracing next-generation
                                       In other growing wireless markets worldwide,
                                                                                              technologies
                                       we’re seeing favorable regulatory shifts that
                                                                                              Our CDMA2000 partners are quickly moving
                                       could lead to growth opportunities for our
                                                                                              to higher-speed EV-DO solutions, which are
                                       technologies on alternative frequency bands,
                                                                                              capable of supporting more advanced, data-
                                       such as CDMA450 in Latin America and WCDMA
                                                                                              intensive applications and services. For our
                                       in the 900-megahertz spectrum in Europe.
                                                                                              WCDMA partners, HSDPA is the next step in
                                       China’s potential CDMA450 market will drama-
                                                                                              advanced technology. As of November, there
                                       tically affect the CDMA450 ecosystem. There
                                                                                              were an estimated 51 EV-DO and 25 HSDPA
                                       were launches of CDMA450 networks this
                                                                                              commercial operators around the world.
                                       year in Latin America, Southeast Asia and
                                       Europe. Russia is rapidly embracing this
                                                                                              Cingular Wireless launched the first commer-
                                       technology and there are now 32 CDMA450
                                                                                              cial HSDPA network in late 2005, with service
                                       operators nationwide.
                                                                                              extended to 115 major cities as of September
                                                                                              2006. South Korea’s KTF is implementing HSDPA,
                                       Our global development team opened an office
                                                                                              with coverage to 84 cities planned by the first
                                       in Johannesburg, South Africa this year to
                                                                                              calendar quarter of 2007. And in Japan, the
                                       support our growing presence in 27 countries
                                                                                              country’s largest wireless operator, NTT
                                       across the continent. The Johannesburg office
                                                                                              DoCoMo, deployed HSDPA in Tokyo, with plans
                                       will serve as a strategic center for QUALCOMM
                                                                                              to serve 70 percent of the nation by early 2007.
                                       operations in this important region.




            QUALCOMM Is Well Positioned to Meet Market Trends
            handset                              emerging markets                 data                             migration from 2g to 3g
            segmentation                         A significant portion of the     Consumers and enterprises        Legacy networks in Europe
            Specific market needs                next one billion subscribers     are demanding multimedia         and in emerging markets
    trend




            include voice, imaging,              will come from areas of the      services in their wireless       are upgrading their systems
            video, music and email.              world that are currently         phones and 3G-embedded           to increase efficiency and
                                                 underserved by wireless.1        laptops.                         improve services.


            Our segmented technology             We are enabling many new         Our company develops and         Our strong partnerships with
            roadmap addresses the                low-cost devices through         sells the most advanced          wireless operators and our
qualcomm
 position




            breadth of market needs.             innovations like our             chipsets on the market for       low-cost high-feature devices
                                                 QUALCOMM Single Chip             high-speed wireless, including   are helping speed the rapid
                                                 Solution (QSC) and via           support for both EV-DO and       transition to advanced
                                                 various supply initiatives.      HSDPA network deployments.       wireless networks.


                                                 GSM Association, February 2006
                                             1




             qualcomm 2006
making a difference in peru: connecting a rural clinic
                                      A small clinic in a rural village a few hours from Machu Picchu serves the people of the
                                      “Sacred Valley of the Incas.” Volunteer U.S. doctors serve residents who would otherwise
                                      have no access to healthcare. Harsh mountainous terrain makes traditional wireline
                                      connectivity unreliable. QUALCOMM donated equipment, including laptops, camera/
                                      video phones, data cards and related services allowing external communications for
                                      the first time. Now, visiting physicians at the clinic can communicate with colleagues
                                      from all over the world in real time to help diagnose patients.
                                      *This program is part of QUALCOMM’s Wireless Reach initiative, a program aimed at empowering
                                       underserved communities worldwide via advanced wireless connectivity.
wireless reach* : peru




                                                                                                                                                        global growth



An estimated one billion people will have access to more than 120
3G mobile broadband networks by the end of calendar 2006.




Source: 3G Americas, November 2006.

                                                                                                                                     qualcomm 2006
making a difference in china: keeping loved ones safe
                                        To empower visually impaired children and their families, QUALCOMM and China
                                        Unicom donated GPS-enabled 3G “Kid Tracker” handsets to the Beijing School for
                                        the Blind. The Kid Tracker is equipped with gpsOne® technology, which connects
                                        with the QPoint servers in the Unicom network to allow parents and emergency
                                        services to track the location of visually impaired children at all times. Should the
                                        need arise, children can call for help with the push of one button, allowing parents
                                        and emergency responders to locate them via a Web interface.
                                        *This program is part of QUALCOMM’s Wireless Reach initiative, a program aimed at empowering
                                         underserved communities worldwide via advanced wireless connectivity.
              wireless reach* : china




More than 200 million mobile handsets worldwide
have shipped featuring QUALCOMM’s gpsOne technology.                                               1




                                                                                            QUALCOMM’s gpsOne Assisted-GPS solution
                                                                                        1

                                                                                            provides the position-location technology behind
                                                                                            the vast majority of the location services at more
                                                                                            than 50 major network operators worldwide.



16 qualcomm 2006
Redefining wireless mobility.




ev-do networks                                                               By calendar year-end 2006, the company




                                                                                                                                                       global growth
In North America, Verizon Wireless and Sprint                                expects to offer mobile broadband data
are now upgrading their nationwide networks.                                 services (using both EV-DO and EV-DO Rev. A)
Verizon Wireless plans to introduce a range of                               in 220 major metropolitan areas.
new services, including instant messaging with
                                                                             strong outlook
multimedia content, and packet-switched all-IP
VoIP. By the end of the second quarter of 2006,                              Analysts predict that advanced 3G wireless
10 million customers were taking advantage of                                networks will serve 1.2 billion people by the
Verizon Wireless’ existing EV-DO service using                               year 2010, accounting for 41 percent of the
phones, PDAs and laptops with PC cards or                                    global wireless subscriber base.1 In the same
embedded EV-DO.                                                              period of time, the percent of users who
                                                                             access broadband services will increase
Also in the U.S., Sprint announced an EV-DO                                  dramatically, with EV-DO alone counting for
Rev. A launch with plans to reach more than                                  more than 340 million subscribers worldwide.
200 million people nationwide, as well as an
agreement to use QUALCOMM’s QChat push-                                      Source: Northern Sky Research.
                                                                        1



to-talk solution. QChat will help Sprint in
migrating its current iDEN users to CDMA.




Data Increasing Wireless Operator Revenue (Data Revenue as Percent of Total Revenue Per User)
verizon wireless (u.s.)                                         sprint (u.s.)                                     telecom italia mobile (italy)

                                                                                                                     22.0%


                                                                                                                  14.3%
                                                                     14.1%
    13.0%

                                                                 8.4%
8.0%




        Q3 2005           Q3 2006                                           Q3 2005          Q3 2006                      Q2 2005     Q2 2006


Quarters noted are calendar quarters.
                                                                                                                                    qualcomm 2006 
Source: Verizon Wireless Q3 06, Sprint Q3 06, Wireless Intelligence Q2 06.
Business Units




18 qualcomm 2006
The right products, for the right market,
at the right time.

qualcomm cdma technologies (qct)                 broadband with unsurpassed mobile processing




                                                                                                                      business units: qct
QCT creates advanced wireless chipsets,          power and battery life. We also sampled our
system software, development tools and           first-generation QSC solutions, introduced
related products to drive technology advance-    the world’s first universal mobile TV chip, and
ments and innovation around the world. These     announced advanced chipsets that enable
technology solutions power many of the world’s   global roaming between CDMA2000 and GSM/
handsets and wireless devices, providing         GPRS networks.
powerful features such as multimedia, position
location, data connectivity, security and        We launched a collaboration with Microsoft
content-rich applications based on our BREW      that will enable device manufacturers to
system and Java®-based technologies.             develop a wider range of affordable, compelling
                                                 Windows Mobile-powered Smartphones. We
a year of progress and planning                  entered into an agreement to launch a new
There were a number of milestones this year at   company (called TechSoft) in China to focus
QCT. These include innovations that strengthen   on the development of application software
our technology roadmap, as well as alliances     for wireless devices, and acquired Berkana
and investments that enhance our supply          Wireless, a Silicon Valley-based fabless
chain capabilities.                              semiconductor company.

QCT continued to make progress in enabling       We also shipped a record number of
feature-rich, slimmer, and more power-effi-      CDMA2000 cell site modem (CSM) voice-
cient devices. We introduced our Snapdragon™     equivalent channel elements this year.
platform, which will drive innovation in elec-   Historically, CSM shipments have been a
tronic devices and personal computing by         strong leading indicator of future demand
delivering ubiquitous connectivity to mobile     in data usage and quantity of handsets.




“Partnering with manufacturers and operators worldwide,
 we develop systems that provide the foundation for
 tomorrow’s wireless services, while delivering what the
 market needs today.”
dr. sanjay k. jha, chief operating officer and group president,
qualcomm cdma technologies


                                                                                                   qualcomm 2006 19
Solutions for a wireless world.




                     solutions for the mass market                       ultra-fast HSUPA chipset, and this year we
                     This year we continued to focus on low-cost         began HSUPA interoperability testing with
                     chips for the emerging markets, driving             several major infrastructure providers.
                     volume and enabling competitive entry-level         We also demonstrated WCDMA in the 900-
                     handsets in emerging markets. Part of the           megahertz spectrum band, which will help
                     driving force behind the growth of CDMA             network operators deploy advanced wireless
                     technology in these markets is the growing          services using existing spectrum.
                     demand for functionality that only 3G CDMA-
                                                                         smart technologies
                     based handsets can offer. To meet that need,
                     11 wireless device manufacturers are currently      QCT continues to redefine mobile capabilities
                     designing handsets based on our new single-         by delivering industry-leading solutions.
                     chip solution.                                      Our Convergence Platform MSM7xxx™-series
                                                                         chipsets are seeing strong traction, and
                     Helping to expand the WCDMA market, we              the first commercial devices are expected
                     sampled the entry-level MSM6245™ WCDMA              next year.
                     and MSM6260™ HSDPA chipsets. Driving the
                     proliferation of mass-market WCDMA devices          Bringing mobile broadband to more users
                     and the migration from 2G to 3G, these solutions    around the world, we are building on our
                     deliver a competitive time-to-market advan-         technology leadership in CDMA2000 and
                     tage to our manufacturing partners.                 WCDMA with the industry’s first EV-DO
                                                                         Rev. A and HSUPA chipsets sampling this year.
                     Meanwhile, more than 10 device manufacturers
                     are now designing products incorporating our        More information about QUALCOMM CDMA Technologies
                                                                         is available at www.3gchipsets.com.




Mobile Processing Power Is Significantly Increasing
qualcomm chipsets have evolved into power-efficient designs that deliver
unparalleled processing power
                                                                                                                    2370
millions of instructions per second (mips)



                                                                                              740
                                                                          250
                                                        160
                     20               23
     10
     1996            1998            2000               2002              2004                2006                  2008
                                                                                                               snapdragon
  msm2000          msm2300        msm3000            msm6500            msm6550            msm7200


20 qualcomm 2006
Wireless devices are bringing voice,
data and multimedia together in one
amazing device.


real time television                              enhanced location services




                                                                                                                       business units: qct
Wireless users will have live TV channels         Enabled by QUALCOMM’s gpsOne solution,
within easy reach and in “real time,” thanks      wireless users have the power to electroni-
to QUALCOMM’s new nationwide MediaFLO             cally “tag” their favorite places and receive
USA network.                                      alerts when friends and loved ones walk or
                                                  drive nearby.
secure identification
                                                  digital rights wallet
Next-generation devices take secure
network access to a new level, with help from     Next-generation Smartphones and devices
sensors able to read thumbprints and other        confirm that music and video downloads are
biometric data.                                   properly licensed, granting permission for
                                                  appropriate playback or viewing.
health and fitness
                                                  mobile multimedia center
Cardiac monitoring sensors can take
advantage of wireless devices to                  Increasingly advanced wireless devices
automatically transmit vital signs to             incorporate ever more sophisticated home
the user’s medical team or fitness coach.         electronics capabilities, including very
                                                  high-resolution photo and video cameras that
                                                  can be projected to flat-panel televisions for
                                                  home and business viewing.




QUALCOMM’s Chipsets Support All Types of Market Needs
                                         value        multimedia          enhanced         convergence
                                       platform        platform           platform           platform

Dual CPU on chip

Enhanced multimedia and graphics

Multimedia and 2D-3D graphics

Integrated gpsOne

Voice and data



                                                                                                    qualcomm 2006 21
Our licensing business fosters
healthy competition.



                   qualcomm technology licensing (qtl)             This model has served us well, first in growing
                   With a licensing program that enables third     the CDMA2000 marketplace. Now we are
                   parties to design, manufacture and sell         also seeing steady growth in the number of
                   products based on QUALCOMM’s industry-          manufacturers selling a wide range of WCDMA
                   leading wireless technology, our licensing      devices at increasingly competitive price points.
                   business model fosters a healthy and
                                                                   competition is key
                   competitive worldwide wireless marketplace.
                   Our inventions drive new revenue streams        Our strong belief in an open and free market-
                   for all our partners, enabling continuing       place goes to the heart of our business. We
                   investments throughout the wireless             know from experience that where competition
                   value chain.                                    is allowed to flourish, prices will go down, and
                                                                   functionality and usage will increase. From
                   While QUALCOMM has substantially grown          the inception of our company, QUALCOMM
                   the number of its inventions over the years,    has sought to stimulate competition by widely
                   we make those innovations available to our      licensing our technologies and promoting
                   licensees without increasing the standard       innovation throughout our industry.
                   royalty rate. Unlike many other companies,
                   we broadly license not only our essential       We have invested heavily in RD, building one
                   patents, but virtually all of our patents. As   of the most impressive intellectual property
                   a result, we enable our licensed partners to    portfolios in the industry. And through that
                   bring exciting new features and functionality   investment in technological advancement,
                   to the wireless consumer.




                   “We have earned commercial success through
                    innovation, technological leadership, years of hard
                    work, sustained RD investment, and enabling
                    our licensee partners with our technology.”
                   marvin blecker, executive vice president and president,
                   qualcomm technology licensing



22 qualcomm 2006
QUALCOMM accelerates
                                                    licensees’ time-to-market.



we have enabled as many vendors as possible         like OFDMA. And this year, we have invested




                                                                                                                                business units: qtl
to participate in the wireless marketplace.         approximately $1.5 billion in RD focused on
The idea has worked. The average selling price      air-interface technology, chipset development
(ASP) for a second-generation CDMA wireless         and software platform capabilities.
handset just 10 years ago was approximately
                                                    our research and development adds
$800. Today, the ASP for all CDMA (WCDMA
                                                    value to the industry
and CDMA2000) wireless handsets is less
than $225.                                          By investing heavily in RD and then licensing
                                                    substantial amounts of our patented innova-
QUALCOMM has the most widely                        tions to our partners in the industry, QUALCOMM
                                                    makes it much easier for wireless equipment
licensed intellectual property
                                                    manufacturers to become competitive without
portfolio in the wireless industry.                 having to make large expenditures on their
                                                    own RD programs.
what’s next?
Our company has achieved success and main-          The result of our business model is a very
tained competitiveness in part due to our           competitive environment that helps new
relentless focus on innovation. We believe that     manufacturers enter the market and enables
our future lies in integrating different airlinks   a wide array of new products and features
and maximizing them for the proper application.     for consumers.
This includes not only CDMA technologies, but
also complementary and emerging technologies        More information about QUALCOMM Technology Licensing
                                                    is available at www.qualcomm.com/qtl.




Our Intellectual Property Position
cumulative u.s. patents (Approximated Numbers)                   cumulative foreign patents

                         5,100

                                                                                         7,400
     4,100


                     1,900
1,500
                                                                                         25,800
   Sep 2005            Sep 2006                                       Sep 2006

        Issued         Issued and Applied                           Granted            Granted and Applied


                                                                                                             qualcomm 2006 23
We’re bringing a new generation of
high-value services to the wireless user.



                   qualcomm internet services (qis)                        impressive market growth this year
                   QIS provides technology and services                    The capabilities enabled by BREW are helping
                   to support and accelerate rich discovery                to drive data revenues for operators around
                   experiences and the delivery of high-value              the world, including KDDI in Japan, which
                   content, including BREW solutions and the               reports that as of this year, subscribers there
                   QChat push-to-talk solution.                            have downloaded a cumulative number of
                                                                           more than 75 million data applications on
                   the premier choice for data services                    more than 20 million BREW devices.
                   A cornerstone of our vision for the future
                   of wireless, our BREW solutions create new              Wireless data industry revenues are
                   opportunities for our industry and make
                                                                           expected to increase from $81 billion
                   wireless data meaningful for consumers. BREW
                                                                           to $150 billion between 2005 and 2009.                       1

                   has been driving the discovery and delivery of
                   data services since 2001. And we’ve continued
                                                                           In the U.S., Verizon Wireless achieved 36
                   to optimize its offerings to meet new opportu-
                                                                           percent growth in gaming downloads over
                   nities in the rapidly evolving mobile world. This
                                                                           the last year since launching premium BREW
                   year our customers are benefiting from several
                                                                           3D games as part of its “V CAST” service. And
                   innovative offerings, including uiOne for
                                                                           the company’s BREW-enabled Get It Now                   SM

                   dynamic user experiences; the deliveryOne
                                                                           subscriber base has increased by more than
                   content-delivery platform; QPoint location
                                                                           sixfold over the last 36 months.
                   services software; and BREW Signature
                   Solutions that enable reduced time-to-market
                                                                           Source: The Yankee Group, “Mobile Content Market Will
                   and capital investment for companies providing
                                                                       1

                                                                           Accelerate Technology Innovation,” January 2006.
                   mobile products and services.




24 qualcomm 2006
In all, there are operators in 31 countries                 designers. The SDK allows them to create




                                                                                                                                    business units: qis
 throughout Europe, Asia, Latin America and                  rich, integrated and dynamic user interfaces
 North America who are now using BREW for                    for mobile handsets that can be updated
 their wireless services.                                    over the air. Several wireless operators have
                                                             announced deployment or plans to deploy
 new products, big opportunities                             our uiOne offering: U.S. Cellular, Sprint and
 At this year’s sold-out BREW Conference,                    Alltel in the U.S., Telecom New Zealand, TIM
 QIS unveiled the new BREW Gaming Signa-                     and O2 in Europe.
 ture Solution, a comprehensive solution that
 accelerates revenue generation throughout                   And as a testament to the opportunities and
 the value chain, enabling wireless operators                revenues made possible by the BREW solution,
 to deliver a compelling consumer gaming                     this June we announced that BREW publishers
 experience, and publishers and developers                   and developers have earned more than $700
 to create the best games possible. TIM in Italy             million from the sale of BREW applications and
 has now commercially launched the BREW                      services since the launch of the first BREW
 Gaming Signature Solution.                                  operator in November 2001.

 As part of a continuing effort to support our               More information about QUALCOMM Internet Services
                                                             is available at www.qualcomm.com/qis.
 customers, we also announced the release of
 our uiOne Software Development Kit (SDK)
 for developers, content providers and graphic




 Worldwide BReW Momentum                                                     “The demand for wireless down-
                                                                              loading services is growing at an
 numbers shown compare
 april 2005  december 2006
                                                                              impressive rate. And we’re seeing
 41            69                    24         31                            exciting technological advancements
                                                                              and countless new applications
 BREW solution                       Countries with wireless operators
 customers                           offering BREW solutions
                                                                              coming to market.”
 32              46                  $350 m             $700 m *              margaret l. “peggy” johnson, executive vice
                                                                              president and president, qualcomm internet
 BREW device                         Cumulative BREW
                                                                              services and mediaflo technologies
 manufacturers                       publisher/developer earnings

* Cumulative as of April 30, 2006.
                                                                                                                 qualcomm 2006 25
 Source: www.brewtoday.com. As of Dec. 2006.
Coming soon...the next evolution
in wireless multimedia.



                   qualcomm mediaflo technologies                      MediaFLO USA will provide its service to
                   QUALCOMM is the innovator of FLO technology,        consumers in partnership with content
                   a key component of the MediaFLO System, an          providers, wireless operators and advertisers.
                   end-to-end solution designed to reduce the          The company is on schedule for commercial
                   cost of delivering multimedia content to large      launch with Verizon Wireless in 2007. With
                   numbers of users simultaneously. Built from         TV-quality video, an easy-to-navigate user
                   the ground up specifically for the mobile           interface, familiar full-length programs and
                   environment, MediaFLO allows consumers              exclusive made-for-mobile content, MediaFLO
                   to channel-surf video, audio and information        USA brings new experiences that take media
                   media on the same mobile handsets they use          and entertainment to new levels.
                   for traditional cellular voice and data services.
                                                                       tests conducted in europe and japan
                   mediaflo usa, inc. on track for                     QUALCOMM and British Sky Broadcasting
                   2007 launch                                         Limited (BSkyB) joined forces to conduct
                   MediaFLO USA, a wholly-owned subsidiary             a MediaFLO technical trial in the United
                   of QUALCOMM, is bringing this revolutionary         Kingdom this year. Completed in December,
                   service to market in the United States.             the successful trial underscored the inherent
                   MediaFLO USA will aggregate premium content         benefits of MediaFLO as a powerful solution
                   from some of the world’s best-known brands          for delivering video services to mobile
                   and deliver it to mobile phones over a nation-      devices in the U.K.
                   wide wireless multicast network.
                                                                       The BSkyB technical trial is the first trial
                   The service is designed to offer an unprece-        of MediaFLO technology in Europe. In
                   dented combination of full-length programming,      addition, QUALCOMM and KDDI have formed
                   short-format clips and realtime information         a joint venture to explore the deployment of
                   and entertainment feeds. It is expected             MediaFLO services in Japan. The openness of
                   to drive sales of handsets, thereby growing         FLO, as well as its significant advantages with
                   licensing royalties and chip sales, helping to      respect to coverage, power consumption and
                   diversify QUALCOMM and positioning us for           cost, set MediaFLO apart from other
                   continued growth.                                   competing technologies.

                                                                       More information about the MediaFLO System and MediaFLO
                                                                       USA is available at www.mediaflo.com.




26 qualcomm 2006
“The combination of QUALCOMM’s wireless leadership




                                                                                                                                                                    business units: mediaflo
                     and MediaFLO USA’s multicasting expertise and
                     relationships with world-class content providers
                     has uniquely positioned us to lead the mobile media
                     services market.”
                        gina lombardi, president, mediaflo usa




                        Worldwide subscription revenue for mobile TV broadcasting
                        is expected to reach more than $9 billion by 2010.                           1




                            worldwide mobile tv broadcast viewers and subscription revenue

                            150                                                                          $10                             Viewers
                                                                                                                                         (in millions)
                            120                                                                          $8
                                                                                                               Revenue ($ in billions)
Viewers (in millions)




                                                                                                                                         Revenue
                             90                                                                          $6                              ($ in billions)

                             60                                                                          $4

                             30                                                                          $2

                               0                                                                         $0
                                       2005               2006           2007   2008   2009   2010




                            Source: In-Stat, June 2006.
                            In-Stat—June, 2006 worldwide subscription.
                        1




                                                                                                                                                 qualcomm 2006 27
Making technology work for business.




                    qualcomm wireless business                        Superior customer service and support
                    solutions (qwbs)                                  24 hours a day, 365 days a year
                    QWBS delivers integrated wireless applications    Rapid, cost-optimized development of inno-
                    and services to businesses around the world.      vative platforms, applications and services
                    We enable enterprises to operate at peak          Agile business processes
                    performance and improve the quality of life
                    for customers in their value chain.               Our QWBS business provides comprehensive
                                                                      wireless platforms and services, including
                    Mobile workforce, enterprise management, risk     two-way data communications systems,
                    assessment and management, and machine-to-        productivity-enhancing applications, wireless
                    machine communications are some of the key        advisory and managed network services and
                    applications being mobilized by enterprises       enterprise-level consulting. Our solutions
                    today. And QWBS has evolved into a full-service   benefit many industries, including for-hire
                    enterprise services provider that helps clients   transportation and logistics, construction,
                    in a growing number of industries.                manufacturing, retail and healthcare.

                    core competencies                                 QUALCOMM’s first wireless enterprise
                    Business intelligence and decision support        product—the satellite-based OmniTRACS®
                    Network management                                mobile communications system for the
                    Creation and delivery of professional services    transportation and logistics markets—
                    Application development and delivery              was introduced in 1998 and proved to be
                    Strategic collaboration                           an innovative force in enterprise mobility.
                    Integration platforms
                    System reliability, redundancy and                 More information is available about QUALCOMM Wireless Business
                                                                       Solutions at www.qualcomm.com/qwbs.
                    high availability



                                                                       key stats

                                                                                                          733,000+
                                                                       6,000+
“We are in the services business.
 Technology is our tool to create                                                                         Mobile units shipped
                                                                       Customers
                                                                                                          to businesses in 40
                                                                       worldwide utilize
 lasting value for our customers.”                                                                        countries on four
                                                                       QWBS products
                                                                                                          continents*
                                                                       and services
joan t. waltman, president, qualcomm
wireless business solutions
                                                                       12.5+ million
                                                                       Data transactions per day processed by
                                                                       the QWBS Network Operations Centers


28 qualcomm 2006                                                      *Cumulative through fiscal 2006.
Proudly serving U.S.
                                                       government needs.



qualcomm government                                    to support first responders during last year’s




                                                                                                                 business units: qwbs, qgov
technologies (qgov)                                    hurricane season, QGOV continues to work with
QGOV leverages QUALCOMM’s core compe-                  federal, state and local agencies and critical
tencies and technologies to deliver wireless           industry partners to provide COP solutions for
capabilities to government users. QGOV is              vehicles, assets and first responders.
also dedicated to adapting and modifying
                                                       supporting first responders
QUALCOMM’s commercial products to provide
specialized capabilities for the government            QGOV is committed to empowering government
that enable interoperable communications               entities with wireless capabilities that will
anywhere and at any time.                              expand enterprise networks to encompass
                                                       robust, high-speed data broadband wireless
With secure, unparalleled voice and data               connectivity to the mobile government worker
capabilities, our technologies are a natural           for greater impact on the public they serve.
fit for government applications. Key QGOV
                                                       delivering situational awareness
products include a secure Type 1 encrypted
handset and a compact deployable wireless              QGOV has the technology and expertise to
system, enabling wireless communications and           enable first-response teams with interoper-
continuity of operations for disaster relief. In       ability, improved visibility for command and
addition, QGOV also provides satellite-based           control, realtime maps displaying current
vehicle and asset tracking solutions.                  locations of team members and enhanced
                                                       dispatch effectiveness. The QUALCOMM
contributing to national security                      QGOV solution augments and extends current
The need to improve military and civil defense         capabilities of today’s public safety systems.
“Common Operating Picture” (COP) awareness is
critical to national security. Following our effort    More information about QUALCOMM Government Technologies
                                                       is available at www.qualcomm.com/qgov.




                                                      “We leverage wireless technologies
                                                       to enhance the ability of government
                                                       agencies to access and share
                                                       information anywhere at any time.”
                                                      kimberly m. koro, president,
                                                      qualcomm government technologies
QUALCOMM Culture




30 qualcomm 2006
We believe in relationships.




inventing the world of tomorrow                  making a difference in everyday life




                                                                                                                     qualcomm culture
A company can only be as forward-thinking        QUALCOMM supports a broad range of com-
as its people. QUALCOMM strives to provide       munity organizations to sustain and support
a supportive, collaborative environment that     a better place for employees, family members,
promotes innovation and teamwork. To support     friends and customers. By partnering with
our global mission of providing advanced wire-   these organizations, we strive to foster
less technologies everywhere, we employ          a community where diverse backgrounds and
a highly diverse workforce and maintain a        perspectives drive the vision of our future.
worldwide network of offices and facilities.     The following is a list of some of our partner
                                                 organizations:
Our company values are innovation, execution
and partnership, and these qualities are         Building Engineering and Science Talent
nurtured through a strong commitment to          Council on Competitiveness
providing education and mentoring across the     Leadership Conference on Civil Rights
organization. We believe that these principles   Education
are central to our success and continuing        National Academy of Engineering
competitiveness.                                 National Action Council for Minorities
                                                 in Engineering
                                                 National Black MBA Association
                                                 National Consortium for Graduate Degrees
                                                 for Minorities in Engineering and Science
                                                 National Society of Black Engineers
                                                 National Society of Hispanic MBAs
                                                 Society of Hispanic Professional Engineers
                                                 Society of Women Engineers
                                                 Urban League




“I am very proud of QUALCOMM’s effort to create a positive
 working environment for employees. That effort pays off
 with the employees’ dedication and innovative contributions.”
dr. daniel l. sullivan, executive vice president, human resources




                                                                                                  qualcomm 2006 31
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide
How Wireless Technology is Improving Lives Worldwide

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How Wireless Technology is Improving Lives Worldwide

  • 1. What inspires us? Annual Report 2006
  • 2. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. QUALCOMM is proud to be a leader in the communications revolution. For more than two decades now, we’ve been innovating with new ideas and executing on our vision. Together with our many partners, we are growing a vital and competitive industry that includes equipment manufacturers, network operators, applications developers and content publishers. Our wireless technologies are making a meaningful difference in the lives of people everywhere. Our goal is connectivity to the people and data that matter most. By making a positive impact on everyday life, we’re part of an industry that is literally changing the world… for the better. table of contents 01 Letter to Stockholders 03 Financial Highlights 06 QUALCOMM Technology 12 Global Growth 18 Business Units 30 QUALCOMM Culture 33 Financial Information
  • 3. Making a difference in everyday life. south korea Realtime Healthcare for Diabetes Patients The “diabetes phone” uses a BREW® application and wireless technology to report glucose levels to medical teams, enabling realtime consultation and care. Blood test data is stored on the phone and sent via Short Message Service (SMS) up to five times a day to the healthcare provider, parent or guardian.
  • 4. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. Martin Kropat product manager, qualcomm internet services “People are always looking for new ways to use their mobile phones. Every day I help developers turn ideas into new applications.”
  • 5. Making a difference in everyday life. north america Bones in Motion (A Personal Fitness Program) Taking advantage of location-based services that are made possible by QUALCOMM’s BREW and gpsOne® solutions, the company Bones in Motion has created a wireless subscription service called BiM Active that enables people to use their mobile devices to record running routes, distances and calories burned to help them achieve personal fitness goals.
  • 6. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. Shawn Covell senior director, qualcomm international government affairs “QUALCOMM’s Wireless Reach™ initiative is helping people around the globe to improve their lives with 3G. Being a part of Wireless Reach and seeing the positive impact of wireless technology—that’s when my job ceases to be work.”
  • 7. Making a difference in everyday life. china Enabling Rural Innovation As part of the global Wireless Reach initiative, QUALCOMM and its partners in China are delivering free wireless phones and service vouchers to disadvantaged groups in underserved rural areas of China. Working with PlaNet Finance (a nongovernmental organization) and wireless operator China Unicom, the goal is to introduce the benefits of mobile communications to microfinance workers and loan recipients, promoting entrepreneurship and economic and social development.
  • 8. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. Eddie Choy senior staff engineer /manager, qualcomm cdma technologies “It simply makes sense to combine portable music players and mobile handsets. And it’s rewarding to know that we’re enhancing the music listening experience for millions of mobile users.”
  • 9. Making a difference in everyday life. japan 300 Million Music Downloads Downloading mobile music is enormously popular in Japan. Approximately four million full-length songs are now being downloaded per month on KDDI’s BREW application, Chaku Uta Full. Since the initial launch of the music service in late 2002, customers have purchased more than 300 million downloads, including song clips, ringtones and full-length songs.
  • 10. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. David Van Driel senior manager, business development, qualcomm wireless business solutions “It’s exciting to have the opportunity to unite two dynamic companies for a common purpose. That alignment enables us to better serve our customers.”
  • 11. Making a difference in everyday life. north america Managing Construction and Forestry Equipment QUALCOMM Wireless Business Solutions® formed an alliance this year with John Deere Construction & Forestry Company to create a monitoring and information delivery system that leverages our GlobalTRACS® equipment management system, providing vital information about equipment location, machine health and service status.
  • 12. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. Uma Chilakapati engineer, qualcomm cdma technologies “The chipsets we create bring wireless data to life. It’s the challenge of creating quality designs… the problems to be overcome…and the insights to be gained. That’s what motivates me to come to work every day.”
  • 13. Making a difference in everyday life. india Online Stock Alerts for Portfolio Trackers In 1996, Tata Teleservices was the first to launch CDMA-based mobile services in India. Today, operating under the brand name Tata Indicom, the company offers a broad range of services, including BSE (Bombay Stock Exchange) Portfolio Tracker. Enabled by QUALCOMM’s BREW solution, this popular stock portfolio application enables consumers to monitor stocks and track their portfolio on the go.
  • 14. Wireless communications technology is fundamentally changing and improving people’s lives worldwide. Dr. Paul E. Jacobs, CEO (left) Steven R. Altman, President (right)
  • 15. Making a difference in everyday life. To Our Stockholders: The technology we are enabling continues to have a growing and positive impact on people’s lives around the world. focus and dedication Fiscal 2006 was the first full year following the transition to our new management team. It was a year in which a small number of competitors sought to challenge us, not in the marketplace, but in courts and regulatory arenas. We will meet these challenges with the highest level of energy and integrity while remaining dedicated to the execution of our business model. Our employees developed new technologies and defined new business models that generated new opportunities for a wider range of partners across multiple industries. Consumers adopted our third-generation (3G) technologies at an accelerating pace both in mature and developing markets. And it was a year in which we returned the strongest financial performance in our history. enabling progress and growth Our business model stimulates a healthy and competitive worldwide wireless marketplace. Our inventions enable new revenue streams for us and for our partners—manufacturers, operators, content providers and developers—enabling continuing investments throughout the wireless value chain. Our focus on effective execution and rewarding partnerships has positioned us for continued growth and leadership in the rapidly advancing global wireless industry. Looking ahead, we believe that, increasingly, the evolution in wireless will be less about competing technologies and more about complementary technologies—working together to provide manufac- turers and operators the richest set of choices on which to profitably build their businesses, and providing users with ever more compelling wireless applications and services. Our strategy is to continue supporting a broad range of technology and software platforms. To that end, our solutions and intellectual property portfolio now integrate multiple radio technologies, support for multiple spectrum bands and an extensive array of data and multimedia capabilities—all designed to speed the introduction by our partners of compelling new services and groundbreaking wireless devices. Among the trends we are seeing in the wireless industry are ubiquitous and inexpensive mobile voice, even higher data speeds and an increasingly extensive set of data services—all seamlessly qualcomm 2006 0
  • 16. integrated in an ever-increasing array of innovative devices. Wireless devices now combine the versatility and capability of a personal computer with true mobility. Enabled by today’s high-speed networks, the mobile phone is becoming a multi-functional device that supports a myriad of applications, including voice, data, multimedia and GPS location-based services, using a variety of wireless networks simultaneously. strong demand for technology Among the growth drivers for our business this year is the increasing demand for our chipsets— semiconductors and system software. In emerging markets like China and India, demand for inexpensive devices based on 3G technology is increasing. In more established markets like North America, South Korea, Japan and Europe, consumers and enterprises continue to upgrade to feature-rich 3G CDMA devices and services. Global demand for 3G wireless surged this year and QUALCOMM technology continues to be the key driver with industry-leading solutions targeting all addressable markets. As of November 2006, there were more than 410 million subscribers to QUALCOMM-enabled wireless networks, including approximately 320 million subscribers to networks based on CDMA2000,® the first 3G solution deployed anywhere in the world. As second-generation (2G) networks make the transition to advanced wireless systems, the WCDMA (UMTS) market is gaining impressive momentum, presenting an additional opportunity for us. As of November 2006, there were more than 90 million WCDMA subscribers worldwide. As we look to future technology deployments, our expertise and continued innovation in CDMA technology have brought us to a leading position in both CDMA2000 and WCDMA next-generation innovations. The high-speed version of CDMA2000, 1xEV-DO, is now available on 44 networks in 29 countries. For our WCDMA customers, we were first-to-market with the enhanced WCDMA next generation solution called High Speed Downlink Packet Access (HSDPA), and we are pleased that our chipset customers have been the first device manufacturers to support HSDPA launches. Each QUALCOMM operating unit plays a key role in innovating and supporting wireless solutions that enable the wireless industry. The Telecommunications Industry Association adopted our FLO™ technology this year as a standard for mobile TV. More than 70 leading companies from around the world have now joined the FLO Forum, the association of wireless industry leaders which drove the FLO standardization effort. Mobile television may very well be the next “killer” application on the cell phone and we are excited to see how consumers react to the commercial introduction of MediaFLO™ in 2007 in the United States. 02 qualcomm 2006
  • 17. We achieved record results in fiscal 2006. revenue and gross margin research and development * diluted earnings * (1) (2) per share (gaap) * ($ in billions) ($ in billions) (2) (3) 33% 52% 14% increase from 2005 increase from 2005 increase from 2005 71% $7.53 2006 $1.54 2006 $1.44 2006 $5.67 2005 $1.01 2005 $1.26 2005 71% $4.88 2004 $0.72 2004 $1.03 2004 70% $3.85 2003 $0.52 2003 $0.51 2003 67% $2.92 2002 $0.45 2002 $0.22 2002 67% 20% 18% 15% 14% 15% 2002-2006 2002-2006 2002-2006 % = Gross Margin % = Percentage of Revenue pro forma diluted cash, cash equivalents and free cash flow ** (4) (5) (6) earnings per share marketable securities ** ($ in billions) (2) (3) ($ in billions) 41% 15% 22% increase from 2005 increase from 2005 increase from 2005 $9.95 2006 $1.64 2006 $2.57 2006 $8.68 2005 $1.16 2005 $2.11 2005 $7.64 2004 $1.07 2004 $2.14 2004 $5.37 2003 $0.71 2003 $1.55 2003 $3.20 2002 $0.48 2002 $0.97 2002 2002-2006 2002-2006 2002-2006 See notes on page 81. (1) (2) (3) (4) (5) (6) * Fiscal 2006 results presented reflect the impact of share based compensation related to our adoption of FAS 123R. Further details are located in our Notes to Consolidated Financial Statements beginning on page 59. qualcomm 2006 0 ** See reconciliation to GAAP amounts on page 80.
  • 18. “Our strong cash flows enable us to continue to invest in developing new technologies through research and development while returning capital to our stockholders through dividends and share repurchases.” william e. keitel, executive vice president and chief financial officer Returning Capital to Stockholders quarterly cash dividend per common share share repurchase program (Based on Date Payable) $.120 $1.5 B * $.090 $.090 $.070 $.070 $1.0 B $.050 $.035 $.035 $.025 $160 M mar mar mar mar dec jun jun jun jun jan jan sep sep sep sep FY 2003 FY 2005 FY 2006 2003 2004 2005 2006 * Gross repurchases. Authorized $2.5 billion on November 7, 2005, Note: The Company affected a two-for-one stock split in August 2004. no expiration date. As of November 2, 2006, $0.9 billion remained All references to per share data have been adjusted to reflect the authorized for repurchase. stock split. Key Honors Our Company is proud to be recognized for our successful business model and the quality of our people, including the following prestigious honors: Eight years in a row on FORTUNE’s list of “100 Best Companies to Work For in America” FORTUNE’s list of Fabless Semiconductor Forbes Platinum List Financial Times Association’s “Most Admired “The Best “List of Most Valuable “Best Financially Companies” Big Companies” Global Companies” Managed Company” 0 qualcomm 2006 qualcomm 2006
  • 19. focused business operations and strong results To ensure long-term growth for our company and industry, we aggressively invest in research and development (RD). In fiscal 2006 we invested approximately $1.5 billion in RD aimed at enhancing the wireless user experience and enabling exciting new services for consumers and enterprises. Our RD efforts have provided us with an industry-leading intellectual property portfolio that is made available to equipment and device manufacturers worldwide. In fiscal 2006, we achieved another year of record revenue, generating $7.53 billion, up 33 percent year-over-year. Through our ongoing focus on operations, our earnings have again increased. In fiscal 2006 we reported net income of $2.47 billion, up 15 percent year-over-year, and diluted earnings per share of $1.44, up 14 percent year-over-year. Operating cash flow was $3.25 billion in fiscal 2006, up 21 percent year-over-year and represented approximately 43 percent of revenue. Our balance sheet strength and pro-competitive business model provide us with significant financial flexibility, allowing us to pursue strategic growth objectives, pay dividends and repurchase shares in our ongoing effort to enhance stockholder value. Building on this commitment in fiscal 2006, we paid cash dividends totaling approximately $698 million and repurchased 34 million shares of our common stock for approximately $1.49 billion, net of related premiums received. Our total cash and marketable securities balance grew to $9.95 billion at the end of fiscal 2006, an increase of 15 percent year-over-year. We are enabling the next evolution in wireless. continued growth and leadership There are significant opportunities ahead for us as more people make advanced wireless technology part of their daily lives. The large-scale migration from 2G GSM to 3G CDMA is progressing through- out the world and market forecasts anticipate considerable increases in device sales with high-speed data capability. This inevitable worldwide migration to 3G is a significant opportunity for QUALCOMM and our partners in the wireless value chain. On behalf of the executive team, we’d like to thank QUALCOMM’s employees and partners world- wide for their outstanding performance this year. With their help, and with support from our investors, we will continue to innovate and invest in the future of wireless. Dr. Paul E. Jacobs Steven R. Altman Chief Executive Officer President qualcomm 2006 0
  • 20. QUALCOMM Technology 06 qualcomm 2006 6 qualcomm 2006
  • 21. QUALCOMM continues its role as the leading enabler of the wireless value chain. advanced wireless technologies on helping the CDMA2000 community achieve qualcomm technology The increasingly widespread availability and its goals for the wireless future. HMMX is demand for wireline and wireless broadband designed to serve the WCDMA community. is driving a convergence of capabilities in Together, these roadmaps support our vision computing devices, including smart phones, for a world where devices can simultaneously laptop computers and personal media players. link with multiple networks and protocols, We continue to drive down cost and power ensuring the optimal solution in any given consumption, yet increase functionality and situation. In other words, these evolving processing power of our chipset solutions, platforms enable “smart” connections so the thereby enabling a broader market for right technology is used for the right service. wireless broadband. There are now more than 70 laptop Through our robust technology roadmaps, we models in design, or commercially are providing a wide range of choices to our available, that feature embedded industry partners and helping drive the advance- mobile broadband connectivity, ment of mobile broadband, rich multimedia based on a QUALCOMM chipset services, location-enhanced applications and embedded wireless technology. (either EV-DO or HSDPA). paving the way for the Whether in the CDMA2000 community or in next generation the WCDMA community, the goal is the same. DO Multicarrier Multilink eXtensions (DMMX) We’re matching the optimal airlink with the and HSDPA Multicarrier Multilink eXtensions appropriate application. And we’re driving (HMMX) are the terms used to describe the convergence of high-speed wireless and QUALCOMM’s dual-path technology roadmap personal electronics into multi-use mobile to the year 2010 and beyond. DMMX focuses devices…through the next decade and beyond. Opposite page: This QUALCOMM engineer is evaluating the antenna component of new chipset reference designs to ensure the most optimal over-the-air performance. qualcomm 2006 0
  • 22. QUALCOMM Offers Complete Technology Roadmaps for the Future EV-DO/UMB Mobile Broadband Evolution Commercialized in 2006 Expected commercialization: 2008 EV-DO Rev. A EV-DO Rev. B Building on EV-DO Rel. 0, EV-DO Rev. A adds support for broad- EV-DO Rev. B enables operators to aggregate multiple EV-DO band data rates and increased capacity in the uplink as well as Rev. A radio frequency (RF) channels to improve user experi- support for advanced realtime services such as high perfor- ence by offering increased capacity and higher data rates and mance VoIP, push-to-talk, video telephony and low-delay gaming. lower delay. Commercialized in 2006 Expected commercialization: 2009 FLASH-OFDM (Pre-UMB) Ultra Mobile Broadband (UMB) A mobile OFDMA implementation for high-speed wireless A highly optimized OFDMA system built from the ground up for data, delivering broadband data rates on the downlink and mobility, and supporting advanced techniques such as MIMO. uplinks, as well as support for realtime services such as VoIP. UMB is well-suited for areas with high data traffic in which wider bandwidths in new or vacant spectrum are available. UMB will coexist with existing Rev. A and Rev. B network deployments. WCDMA/LTE Mobile Broadband Evolution Commercialized in 2005 Expected commercialization: 2007 Expected commercialization: 2008 HSDPA (Rel. 5) HSUPA (Rel. 6) HSPA+ (Rel. 7 Rel. 8) Similar to EV-DO Rel. 0, HSDPA offers broad- Similar to EV-DO Rev. A, HSUPA adds HSPA+ makes improvements over HSUPA band downloads and is now being deployed support for broadband data rates and to increase system performance in worldwide. This upgrade to WCDMA Rel. 99 increased capacity in the uplink as well existing 5 MHz deployments. Improve- provides broadband data rates and as support for advanced realtime ments include higher data rates and increased capacity in the downlink, signi- services such as high performance increased capacity with advanced ficantly improving end-user experience VoIP, push-to-talk, packet video techniques such as MIMO, as well as on existing applications such as video- telephony and low-delay gaming. enhancements to system capacity for on-demand, web browsing and email. realtime services such as VoIP. Expected commercialization: 2010+ LTE An optimized OFDMA system designed to provide high performance in a mobile environment, including advanced techniques such as MIMO. LTE is well-suited for areas with high data traffic in which wider bandwidths in new or vacant spectrum are available. LTE will coexist with existing HSPA and HSPA+ network deployments. 0 qualcomm 2006 qualcomm 2006
  • 23. Our solutions enable advanced applications. driving the discovery and delivery transforming multimedia delivery qualcomm technology of data services QUALCOMM also created the MediaFLO Today’s consumers have access to an exciting System, an end-to-end broadcasting system array of wireless capabilities, thanks to the for high-quality video streams, audio-only increasing availability of high-speed EV-DO streams, Clipcast™ media and IP datacasting and HSDPA data networks. A key part of to mobile handsets. this success formula is the BREW solution for wireless data applications and services. Based on the standardized FLO technology, the MediaFLO System is designed to optimize Operators, handset manufacturers, media coverage and capacity while delivering the most companies, application publishers and devel- compelling user experience. The MediaFLO opers—all are using BREW to offer feature-rich, solution provides the most efficient delivery value-added products and services, ultimately of streaming news, information and entertain- enriching the user experience and making wire- ment and is the foundation of the nationwide less data meaningful for consumers. BREW mobile multicast network operated by customers can benefit from comprehensive QUALCOMM’s wholly-owned subsidiary and targeted BREW Signature Solutions that MediaFLO USA, Inc. enable reduced time-to-market and capital investment for companies providing mobile Engineered specifically for the mobile products and services. environment, MediaFLO’s technology-based multimedia multicasting will complement BREW customers can also benefit from wireless operators’ cellular voice and data several modular BREW offerings: services, delivering content to cellular handsets used on their existing data-enabled uiOne™ for rich, integrated and dynamic user 3G networks. experiences with fast access to a variety of services on wireless devices. deliveryOne™ for differentiated and tightly BREW and MediaFLO are QUALCOMM innovations that integrated, operator-managed support and delivery of advanced wireless data content help wireless operators differentiate their services with and services. premium content. QPoint™ location server that enables location- based services (LBS).
  • 24. Bringing a new generation of services to the wireless user. solutions for cdma2000/ev-do solutions for wcdma/hsdpa networks networks Approximately 588 devices are now in design More than 27 equipment manufacturers are or commercially launched based on EV-DO. now designing or offering WCDMA devices. Five manufacturers are now designing devices A cumulative total of more than 423 WCDMA with the first generation of QUALCOMM device models have now launched. Single Chip™ (QSC™) solutions, which integrate We supported the world’s first large HSDPA multiple components for slimmer, less launch (by Cingular Wireless in the U.S.). expensive handsets. QCT enables the world’s first commercially We sampled the MSM6800™ chipset, the first available HSDPA devices. to support EV-DO Rev. A, and QUALCOMM’s Further enhancements of the roadmap will first sampled chipset based on 65-nanometer be delivered with HSPA+ and Long-Term process technology. Evolution (LTE). The first EV-DO Rev. A network was commer- cialized in October of 2006 with many more planned for early 2007. Further enhancements of the roadmap will be delivered with EV-DO Rev. B and Ultra Mobile Broadband (UMB). Our Acquisitions and Investments Enable Additional Advancements airgo networks berkana elata flarion iridigm display mediaflo usa investment wireless technologies corporation Advanced A unified A nationwide Advanced Affordable, low- OFDMA Wireless Local multimedia multicast network semiconductor technology power displays Area Network content delivery and services technology 1 for tomorrow’s (WLAN technology) platform operator wireless devices Enhanced connec- Increased Strengthened Greater A new division, Lower cost video tivity integrated integration, lower content manage- expertise and and multimedia QUALCOMM into our chipsets cost and faster ment capabilities intellectual MEMS2 Technology, content delivered benefit helps drive down time-to-market via QUALCOMM’s property rights focused on simultaneously to costs and increases for QUALCOMM deliveryOne (IPR) in OFDMA, enhanced user large audiences in capabilities for chipset solutions offering an enabler of experiences the U.S. new devices next-generation and extended wireless services battery life Featuring complementary metal oxide semiconductor (CMOS) 1 radio frequency integrated circuits (RFICs) 0 qualcomm 2006 micro-electro-mechanical systems 2
  • 25. making a difference in the u.s. navy: mission-critical technology Whether in peacetime or time of war, the modern U.S. Navy depends on secure and reliable communications to fulfill its vital global mission. To modernize communications for its unique mobile workforce, the Navy chose 3G wireless connectivity. Now serving more than 700,000 U.S. Navy and Marine personnel, the system represents the world’s largest and most secure intranet. Notes Admiral James Godwin, “A 3G mobile wireless connection makes our work- force truly mobile and generates a lot of savings along the way.” *The QUALCOMM-sponsored 3G A-List™ awards program honors innovative and successful 3g a-list * winner: the navy commercially deployed enterprise wireless data solutions based on 3G technology. qualcomm technology qualphone rf micro snaptrack spike techsoft trigenix devices (rfmd) technologies technology Position location Application IP-based BlueTooth® Advanced User interface embedded client and E911 services software for connectivity (90 nanometer) customization software solutions wireless devices technology wafer technology for mobile devices in Asian markets Cost savings Accelerated Enhancements Advanced Enhanced user QUALCOMM’s delivery of multi- to our chipset gpsOne and wireless services experiences via and smaller media-capable, solutions help QPoint positioning in key emerging form factors QUALCOMM’s feature-rich manufacturers solutions have markets uiOne offering to make device wireless chipset decrease time- enabled a total manufacturers solutions to-market with of more than 200 more competitive compelling million wireless new devices devices qualcomm 2006
  • 27. Global demand for wireless spells opportunity for all. market trends The India market had another strong year, global growth The WCDMA market is growing around the thanks in part to QUALCOMM’s market- world. In Western Europe, net subscriber addi- leading efforts to drive down handset costs. tions are moving rapidly to WCDMA and in the CDMA2000 is changing this landscape by June 2006 quarter, WCDMA constituted an offering revenue-generating data services in estimated 41 percent of the handset shipments sub-$50 handsets. As evidence of our progress and 62 percent of the handset revenue.1 This on this front, CDMA devices accounted for an was also the first quarter in which the overall estimated 53 percent of all handsets in the volume of estimated WCDMA handset revenue sub-$50 tier, in the first half 2006.2 surpassed that of GSM in Western Europe. In China, the world’s largest wireless market, BREW is also gaining traction in WCDMA seven wireless equipment manufacturers are markets. In the United Kingdom, O2 announced now QUALCOMM WCDMA chipset customers. the first launch of uiOne on their ICE phone, which gives users the ability to download and In India and China, users with low-end reconfigure the user interface. And this year devices are taking advantage of 3G Telecom Italia Mobile (TIM) in Italy and Zapp data services, leading to increased Mobile in Romania were the first European operator revenues. wireless operators to announce deployments of the full BREW system. Based on estimates from Strategy Analytics, Yankee Group 1 and QUALCOMM. Yankee Q2, 2006 India Handset Analysis report. 2 qualcomm 2006
  • 28. Use of wireless data comes of age. markets embracing next-generation In other growing wireless markets worldwide, technologies we’re seeing favorable regulatory shifts that Our CDMA2000 partners are quickly moving could lead to growth opportunities for our to higher-speed EV-DO solutions, which are technologies on alternative frequency bands, capable of supporting more advanced, data- such as CDMA450 in Latin America and WCDMA intensive applications and services. For our in the 900-megahertz spectrum in Europe. WCDMA partners, HSDPA is the next step in China’s potential CDMA450 market will drama- advanced technology. As of November, there tically affect the CDMA450 ecosystem. There were an estimated 51 EV-DO and 25 HSDPA were launches of CDMA450 networks this commercial operators around the world. year in Latin America, Southeast Asia and Europe. Russia is rapidly embracing this Cingular Wireless launched the first commer- technology and there are now 32 CDMA450 cial HSDPA network in late 2005, with service operators nationwide. extended to 115 major cities as of September 2006. South Korea’s KTF is implementing HSDPA, Our global development team opened an office with coverage to 84 cities planned by the first in Johannesburg, South Africa this year to calendar quarter of 2007. And in Japan, the support our growing presence in 27 countries country’s largest wireless operator, NTT across the continent. The Johannesburg office DoCoMo, deployed HSDPA in Tokyo, with plans will serve as a strategic center for QUALCOMM to serve 70 percent of the nation by early 2007. operations in this important region. QUALCOMM Is Well Positioned to Meet Market Trends handset emerging markets data migration from 2g to 3g segmentation A significant portion of the Consumers and enterprises Legacy networks in Europe Specific market needs next one billion subscribers are demanding multimedia and in emerging markets trend include voice, imaging, will come from areas of the services in their wireless are upgrading their systems video, music and email. world that are currently phones and 3G-embedded to increase efficiency and underserved by wireless.1 laptops. improve services. Our segmented technology We are enabling many new Our company develops and Our strong partnerships with roadmap addresses the low-cost devices through sells the most advanced wireless operators and our qualcomm position breadth of market needs. innovations like our chipsets on the market for low-cost high-feature devices QUALCOMM Single Chip high-speed wireless, including are helping speed the rapid Solution (QSC) and via support for both EV-DO and transition to advanced various supply initiatives. HSDPA network deployments. wireless networks. GSM Association, February 2006 1 qualcomm 2006
  • 29. making a difference in peru: connecting a rural clinic A small clinic in a rural village a few hours from Machu Picchu serves the people of the “Sacred Valley of the Incas.” Volunteer U.S. doctors serve residents who would otherwise have no access to healthcare. Harsh mountainous terrain makes traditional wireline connectivity unreliable. QUALCOMM donated equipment, including laptops, camera/ video phones, data cards and related services allowing external communications for the first time. Now, visiting physicians at the clinic can communicate with colleagues from all over the world in real time to help diagnose patients. *This program is part of QUALCOMM’s Wireless Reach initiative, a program aimed at empowering underserved communities worldwide via advanced wireless connectivity. wireless reach* : peru global growth An estimated one billion people will have access to more than 120 3G mobile broadband networks by the end of calendar 2006. Source: 3G Americas, November 2006. qualcomm 2006
  • 30. making a difference in china: keeping loved ones safe To empower visually impaired children and their families, QUALCOMM and China Unicom donated GPS-enabled 3G “Kid Tracker” handsets to the Beijing School for the Blind. The Kid Tracker is equipped with gpsOne® technology, which connects with the QPoint servers in the Unicom network to allow parents and emergency services to track the location of visually impaired children at all times. Should the need arise, children can call for help with the push of one button, allowing parents and emergency responders to locate them via a Web interface. *This program is part of QUALCOMM’s Wireless Reach initiative, a program aimed at empowering underserved communities worldwide via advanced wireless connectivity. wireless reach* : china More than 200 million mobile handsets worldwide have shipped featuring QUALCOMM’s gpsOne technology. 1 QUALCOMM’s gpsOne Assisted-GPS solution 1 provides the position-location technology behind the vast majority of the location services at more than 50 major network operators worldwide. 16 qualcomm 2006
  • 31. Redefining wireless mobility. ev-do networks By calendar year-end 2006, the company global growth In North America, Verizon Wireless and Sprint expects to offer mobile broadband data are now upgrading their nationwide networks. services (using both EV-DO and EV-DO Rev. A) Verizon Wireless plans to introduce a range of in 220 major metropolitan areas. new services, including instant messaging with strong outlook multimedia content, and packet-switched all-IP VoIP. By the end of the second quarter of 2006, Analysts predict that advanced 3G wireless 10 million customers were taking advantage of networks will serve 1.2 billion people by the Verizon Wireless’ existing EV-DO service using year 2010, accounting for 41 percent of the phones, PDAs and laptops with PC cards or global wireless subscriber base.1 In the same embedded EV-DO. period of time, the percent of users who access broadband services will increase Also in the U.S., Sprint announced an EV-DO dramatically, with EV-DO alone counting for Rev. A launch with plans to reach more than more than 340 million subscribers worldwide. 200 million people nationwide, as well as an agreement to use QUALCOMM’s QChat push- Source: Northern Sky Research. 1 to-talk solution. QChat will help Sprint in migrating its current iDEN users to CDMA. Data Increasing Wireless Operator Revenue (Data Revenue as Percent of Total Revenue Per User) verizon wireless (u.s.) sprint (u.s.) telecom italia mobile (italy) 22.0% 14.3% 14.1% 13.0% 8.4% 8.0% Q3 2005 Q3 2006 Q3 2005 Q3 2006 Q2 2005 Q2 2006 Quarters noted are calendar quarters. qualcomm 2006 Source: Verizon Wireless Q3 06, Sprint Q3 06, Wireless Intelligence Q2 06.
  • 33. The right products, for the right market, at the right time. qualcomm cdma technologies (qct) broadband with unsurpassed mobile processing business units: qct QCT creates advanced wireless chipsets, power and battery life. We also sampled our system software, development tools and first-generation QSC solutions, introduced related products to drive technology advance- the world’s first universal mobile TV chip, and ments and innovation around the world. These announced advanced chipsets that enable technology solutions power many of the world’s global roaming between CDMA2000 and GSM/ handsets and wireless devices, providing GPRS networks. powerful features such as multimedia, position location, data connectivity, security and We launched a collaboration with Microsoft content-rich applications based on our BREW that will enable device manufacturers to system and Java®-based technologies. develop a wider range of affordable, compelling Windows Mobile-powered Smartphones. We a year of progress and planning entered into an agreement to launch a new There were a number of milestones this year at company (called TechSoft) in China to focus QCT. These include innovations that strengthen on the development of application software our technology roadmap, as well as alliances for wireless devices, and acquired Berkana and investments that enhance our supply Wireless, a Silicon Valley-based fabless chain capabilities. semiconductor company. QCT continued to make progress in enabling We also shipped a record number of feature-rich, slimmer, and more power-effi- CDMA2000 cell site modem (CSM) voice- cient devices. We introduced our Snapdragon™ equivalent channel elements this year. platform, which will drive innovation in elec- Historically, CSM shipments have been a tronic devices and personal computing by strong leading indicator of future demand delivering ubiquitous connectivity to mobile in data usage and quantity of handsets. “Partnering with manufacturers and operators worldwide, we develop systems that provide the foundation for tomorrow’s wireless services, while delivering what the market needs today.” dr. sanjay k. jha, chief operating officer and group president, qualcomm cdma technologies qualcomm 2006 19
  • 34. Solutions for a wireless world. solutions for the mass market ultra-fast HSUPA chipset, and this year we This year we continued to focus on low-cost began HSUPA interoperability testing with chips for the emerging markets, driving several major infrastructure providers. volume and enabling competitive entry-level We also demonstrated WCDMA in the 900- handsets in emerging markets. Part of the megahertz spectrum band, which will help driving force behind the growth of CDMA network operators deploy advanced wireless technology in these markets is the growing services using existing spectrum. demand for functionality that only 3G CDMA- smart technologies based handsets can offer. To meet that need, 11 wireless device manufacturers are currently QCT continues to redefine mobile capabilities designing handsets based on our new single- by delivering industry-leading solutions. chip solution. Our Convergence Platform MSM7xxx™-series chipsets are seeing strong traction, and Helping to expand the WCDMA market, we the first commercial devices are expected sampled the entry-level MSM6245™ WCDMA next year. and MSM6260™ HSDPA chipsets. Driving the proliferation of mass-market WCDMA devices Bringing mobile broadband to more users and the migration from 2G to 3G, these solutions around the world, we are building on our deliver a competitive time-to-market advan- technology leadership in CDMA2000 and tage to our manufacturing partners. WCDMA with the industry’s first EV-DO Rev. A and HSUPA chipsets sampling this year. Meanwhile, more than 10 device manufacturers are now designing products incorporating our More information about QUALCOMM CDMA Technologies is available at www.3gchipsets.com. Mobile Processing Power Is Significantly Increasing qualcomm chipsets have evolved into power-efficient designs that deliver unparalleled processing power 2370 millions of instructions per second (mips) 740 250 160 20 23 10 1996 1998 2000 2002 2004 2006 2008 snapdragon msm2000 msm2300 msm3000 msm6500 msm6550 msm7200 20 qualcomm 2006
  • 35. Wireless devices are bringing voice, data and multimedia together in one amazing device. real time television enhanced location services business units: qct Wireless users will have live TV channels Enabled by QUALCOMM’s gpsOne solution, within easy reach and in “real time,” thanks wireless users have the power to electroni- to QUALCOMM’s new nationwide MediaFLO cally “tag” their favorite places and receive USA network. alerts when friends and loved ones walk or drive nearby. secure identification digital rights wallet Next-generation devices take secure network access to a new level, with help from Next-generation Smartphones and devices sensors able to read thumbprints and other confirm that music and video downloads are biometric data. properly licensed, granting permission for appropriate playback or viewing. health and fitness mobile multimedia center Cardiac monitoring sensors can take advantage of wireless devices to Increasingly advanced wireless devices automatically transmit vital signs to incorporate ever more sophisticated home the user’s medical team or fitness coach. electronics capabilities, including very high-resolution photo and video cameras that can be projected to flat-panel televisions for home and business viewing. QUALCOMM’s Chipsets Support All Types of Market Needs value multimedia enhanced convergence platform platform platform platform Dual CPU on chip Enhanced multimedia and graphics Multimedia and 2D-3D graphics Integrated gpsOne Voice and data qualcomm 2006 21
  • 36. Our licensing business fosters healthy competition. qualcomm technology licensing (qtl) This model has served us well, first in growing With a licensing program that enables third the CDMA2000 marketplace. Now we are parties to design, manufacture and sell also seeing steady growth in the number of products based on QUALCOMM’s industry- manufacturers selling a wide range of WCDMA leading wireless technology, our licensing devices at increasingly competitive price points. business model fosters a healthy and competition is key competitive worldwide wireless marketplace. Our inventions drive new revenue streams Our strong belief in an open and free market- for all our partners, enabling continuing place goes to the heart of our business. We investments throughout the wireless know from experience that where competition value chain. is allowed to flourish, prices will go down, and functionality and usage will increase. From While QUALCOMM has substantially grown the inception of our company, QUALCOMM the number of its inventions over the years, has sought to stimulate competition by widely we make those innovations available to our licensing our technologies and promoting licensees without increasing the standard innovation throughout our industry. royalty rate. Unlike many other companies, we broadly license not only our essential We have invested heavily in RD, building one patents, but virtually all of our patents. As of the most impressive intellectual property a result, we enable our licensed partners to portfolios in the industry. And through that bring exciting new features and functionality investment in technological advancement, to the wireless consumer. “We have earned commercial success through innovation, technological leadership, years of hard work, sustained RD investment, and enabling our licensee partners with our technology.” marvin blecker, executive vice president and president, qualcomm technology licensing 22 qualcomm 2006
  • 37. QUALCOMM accelerates licensees’ time-to-market. we have enabled as many vendors as possible like OFDMA. And this year, we have invested business units: qtl to participate in the wireless marketplace. approximately $1.5 billion in RD focused on The idea has worked. The average selling price air-interface technology, chipset development (ASP) for a second-generation CDMA wireless and software platform capabilities. handset just 10 years ago was approximately our research and development adds $800. Today, the ASP for all CDMA (WCDMA value to the industry and CDMA2000) wireless handsets is less than $225. By investing heavily in RD and then licensing substantial amounts of our patented innova- QUALCOMM has the most widely tions to our partners in the industry, QUALCOMM makes it much easier for wireless equipment licensed intellectual property manufacturers to become competitive without portfolio in the wireless industry. having to make large expenditures on their own RD programs. what’s next? Our company has achieved success and main- The result of our business model is a very tained competitiveness in part due to our competitive environment that helps new relentless focus on innovation. We believe that manufacturers enter the market and enables our future lies in integrating different airlinks a wide array of new products and features and maximizing them for the proper application. for consumers. This includes not only CDMA technologies, but also complementary and emerging technologies More information about QUALCOMM Technology Licensing is available at www.qualcomm.com/qtl. Our Intellectual Property Position cumulative u.s. patents (Approximated Numbers) cumulative foreign patents 5,100 7,400 4,100 1,900 1,500 25,800 Sep 2005 Sep 2006 Sep 2006 Issued Issued and Applied Granted Granted and Applied qualcomm 2006 23
  • 38. We’re bringing a new generation of high-value services to the wireless user. qualcomm internet services (qis) impressive market growth this year QIS provides technology and services The capabilities enabled by BREW are helping to support and accelerate rich discovery to drive data revenues for operators around experiences and the delivery of high-value the world, including KDDI in Japan, which content, including BREW solutions and the reports that as of this year, subscribers there QChat push-to-talk solution. have downloaded a cumulative number of more than 75 million data applications on the premier choice for data services more than 20 million BREW devices. A cornerstone of our vision for the future of wireless, our BREW solutions create new Wireless data industry revenues are opportunities for our industry and make expected to increase from $81 billion wireless data meaningful for consumers. BREW to $150 billion between 2005 and 2009. 1 has been driving the discovery and delivery of data services since 2001. And we’ve continued In the U.S., Verizon Wireless achieved 36 to optimize its offerings to meet new opportu- percent growth in gaming downloads over nities in the rapidly evolving mobile world. This the last year since launching premium BREW year our customers are benefiting from several 3D games as part of its “V CAST” service. And innovative offerings, including uiOne for the company’s BREW-enabled Get It Now SM dynamic user experiences; the deliveryOne subscriber base has increased by more than content-delivery platform; QPoint location sixfold over the last 36 months. services software; and BREW Signature Solutions that enable reduced time-to-market Source: The Yankee Group, “Mobile Content Market Will and capital investment for companies providing 1 Accelerate Technology Innovation,” January 2006. mobile products and services. 24 qualcomm 2006
  • 39. In all, there are operators in 31 countries designers. The SDK allows them to create business units: qis throughout Europe, Asia, Latin America and rich, integrated and dynamic user interfaces North America who are now using BREW for for mobile handsets that can be updated their wireless services. over the air. Several wireless operators have announced deployment or plans to deploy new products, big opportunities our uiOne offering: U.S. Cellular, Sprint and At this year’s sold-out BREW Conference, Alltel in the U.S., Telecom New Zealand, TIM QIS unveiled the new BREW Gaming Signa- and O2 in Europe. ture Solution, a comprehensive solution that accelerates revenue generation throughout And as a testament to the opportunities and the value chain, enabling wireless operators revenues made possible by the BREW solution, to deliver a compelling consumer gaming this June we announced that BREW publishers experience, and publishers and developers and developers have earned more than $700 to create the best games possible. TIM in Italy million from the sale of BREW applications and has now commercially launched the BREW services since the launch of the first BREW Gaming Signature Solution. operator in November 2001. As part of a continuing effort to support our More information about QUALCOMM Internet Services is available at www.qualcomm.com/qis. customers, we also announced the release of our uiOne Software Development Kit (SDK) for developers, content providers and graphic Worldwide BReW Momentum “The demand for wireless down- loading services is growing at an numbers shown compare april 2005 december 2006 impressive rate. And we’re seeing 41 69 24 31 exciting technological advancements and countless new applications BREW solution Countries with wireless operators customers offering BREW solutions coming to market.” 32 46 $350 m $700 m * margaret l. “peggy” johnson, executive vice president and president, qualcomm internet BREW device Cumulative BREW services and mediaflo technologies manufacturers publisher/developer earnings * Cumulative as of April 30, 2006. qualcomm 2006 25 Source: www.brewtoday.com. As of Dec. 2006.
  • 40. Coming soon...the next evolution in wireless multimedia. qualcomm mediaflo technologies MediaFLO USA will provide its service to QUALCOMM is the innovator of FLO technology, consumers in partnership with content a key component of the MediaFLO System, an providers, wireless operators and advertisers. end-to-end solution designed to reduce the The company is on schedule for commercial cost of delivering multimedia content to large launch with Verizon Wireless in 2007. With numbers of users simultaneously. Built from TV-quality video, an easy-to-navigate user the ground up specifically for the mobile interface, familiar full-length programs and environment, MediaFLO allows consumers exclusive made-for-mobile content, MediaFLO to channel-surf video, audio and information USA brings new experiences that take media media on the same mobile handsets they use and entertainment to new levels. for traditional cellular voice and data services. tests conducted in europe and japan mediaflo usa, inc. on track for QUALCOMM and British Sky Broadcasting 2007 launch Limited (BSkyB) joined forces to conduct MediaFLO USA, a wholly-owned subsidiary a MediaFLO technical trial in the United of QUALCOMM, is bringing this revolutionary Kingdom this year. Completed in December, service to market in the United States. the successful trial underscored the inherent MediaFLO USA will aggregate premium content benefits of MediaFLO as a powerful solution from some of the world’s best-known brands for delivering video services to mobile and deliver it to mobile phones over a nation- devices in the U.K. wide wireless multicast network. The BSkyB technical trial is the first trial The service is designed to offer an unprece- of MediaFLO technology in Europe. In dented combination of full-length programming, addition, QUALCOMM and KDDI have formed short-format clips and realtime information a joint venture to explore the deployment of and entertainment feeds. It is expected MediaFLO services in Japan. The openness of to drive sales of handsets, thereby growing FLO, as well as its significant advantages with licensing royalties and chip sales, helping to respect to coverage, power consumption and diversify QUALCOMM and positioning us for cost, set MediaFLO apart from other continued growth. competing technologies. More information about the MediaFLO System and MediaFLO USA is available at www.mediaflo.com. 26 qualcomm 2006
  • 41. “The combination of QUALCOMM’s wireless leadership business units: mediaflo and MediaFLO USA’s multicasting expertise and relationships with world-class content providers has uniquely positioned us to lead the mobile media services market.” gina lombardi, president, mediaflo usa Worldwide subscription revenue for mobile TV broadcasting is expected to reach more than $9 billion by 2010. 1 worldwide mobile tv broadcast viewers and subscription revenue 150 $10 Viewers (in millions) 120 $8 Revenue ($ in billions) Viewers (in millions) Revenue 90 $6 ($ in billions) 60 $4 30 $2 0 $0 2005 2006 2007 2008 2009 2010 Source: In-Stat, June 2006. In-Stat—June, 2006 worldwide subscription. 1 qualcomm 2006 27
  • 42. Making technology work for business. qualcomm wireless business Superior customer service and support solutions (qwbs) 24 hours a day, 365 days a year QWBS delivers integrated wireless applications Rapid, cost-optimized development of inno- and services to businesses around the world. vative platforms, applications and services We enable enterprises to operate at peak Agile business processes performance and improve the quality of life for customers in their value chain. Our QWBS business provides comprehensive wireless platforms and services, including Mobile workforce, enterprise management, risk two-way data communications systems, assessment and management, and machine-to- productivity-enhancing applications, wireless machine communications are some of the key advisory and managed network services and applications being mobilized by enterprises enterprise-level consulting. Our solutions today. And QWBS has evolved into a full-service benefit many industries, including for-hire enterprise services provider that helps clients transportation and logistics, construction, in a growing number of industries. manufacturing, retail and healthcare. core competencies QUALCOMM’s first wireless enterprise Business intelligence and decision support product—the satellite-based OmniTRACS® Network management mobile communications system for the Creation and delivery of professional services transportation and logistics markets— Application development and delivery was introduced in 1998 and proved to be Strategic collaboration an innovative force in enterprise mobility. Integration platforms System reliability, redundancy and More information is available about QUALCOMM Wireless Business Solutions at www.qualcomm.com/qwbs. high availability key stats 733,000+ 6,000+ “We are in the services business. Technology is our tool to create Mobile units shipped Customers to businesses in 40 worldwide utilize lasting value for our customers.” countries on four QWBS products continents* and services joan t. waltman, president, qualcomm wireless business solutions 12.5+ million Data transactions per day processed by the QWBS Network Operations Centers 28 qualcomm 2006 *Cumulative through fiscal 2006.
  • 43. Proudly serving U.S. government needs. qualcomm government to support first responders during last year’s business units: qwbs, qgov technologies (qgov) hurricane season, QGOV continues to work with QGOV leverages QUALCOMM’s core compe- federal, state and local agencies and critical tencies and technologies to deliver wireless industry partners to provide COP solutions for capabilities to government users. QGOV is vehicles, assets and first responders. also dedicated to adapting and modifying supporting first responders QUALCOMM’s commercial products to provide specialized capabilities for the government QGOV is committed to empowering government that enable interoperable communications entities with wireless capabilities that will anywhere and at any time. expand enterprise networks to encompass robust, high-speed data broadband wireless With secure, unparalleled voice and data connectivity to the mobile government worker capabilities, our technologies are a natural for greater impact on the public they serve. fit for government applications. Key QGOV delivering situational awareness products include a secure Type 1 encrypted handset and a compact deployable wireless QGOV has the technology and expertise to system, enabling wireless communications and enable first-response teams with interoper- continuity of operations for disaster relief. In ability, improved visibility for command and addition, QGOV also provides satellite-based control, realtime maps displaying current vehicle and asset tracking solutions. locations of team members and enhanced dispatch effectiveness. The QUALCOMM contributing to national security QGOV solution augments and extends current The need to improve military and civil defense capabilities of today’s public safety systems. “Common Operating Picture” (COP) awareness is critical to national security. Following our effort More information about QUALCOMM Government Technologies is available at www.qualcomm.com/qgov. “We leverage wireless technologies to enhance the ability of government agencies to access and share information anywhere at any time.” kimberly m. koro, president, qualcomm government technologies
  • 45. We believe in relationships. inventing the world of tomorrow making a difference in everyday life qualcomm culture A company can only be as forward-thinking QUALCOMM supports a broad range of com- as its people. QUALCOMM strives to provide munity organizations to sustain and support a supportive, collaborative environment that a better place for employees, family members, promotes innovation and teamwork. To support friends and customers. By partnering with our global mission of providing advanced wire- these organizations, we strive to foster less technologies everywhere, we employ a community where diverse backgrounds and a highly diverse workforce and maintain a perspectives drive the vision of our future. worldwide network of offices and facilities. The following is a list of some of our partner organizations: Our company values are innovation, execution and partnership, and these qualities are Building Engineering and Science Talent nurtured through a strong commitment to Council on Competitiveness providing education and mentoring across the Leadership Conference on Civil Rights organization. We believe that these principles Education are central to our success and continuing National Academy of Engineering competitiveness. National Action Council for Minorities in Engineering National Black MBA Association National Consortium for Graduate Degrees for Minorities in Engineering and Science National Society of Black Engineers National Society of Hispanic MBAs Society of Hispanic Professional Engineers Society of Women Engineers Urban League “I am very proud of QUALCOMM’s effort to create a positive working environment for employees. That effort pays off with the employees’ dedication and innovative contributions.” dr. daniel l. sullivan, executive vice president, human resources qualcomm 2006 31