>> rose: welcome to the program. tonight, we talk about the mobile revolution in the united states and around the world with paul jacobs. he is the c.e.o. of qualcomm. >> there's a lot of opportunities for us. i mean, obviously the smartphone, you know, trend is going to continue. it's growing like crazy. and now we're seeing p.c.s really being subsumed by smart foams, whether it's tabloids or the fact that microsoft put windows on top of our choips tiger. it's become mobile. i look farther into the future and say the wireless technol will be an enabling technology for a lot of other industries. >> rose: we continue with a conversation on the sounds of science with "radiolab" cohosts jad abumrad, and robert krulwich. >> there are moments in the busyness of your life when you're crossing the street, and you think, "i'm late to be

robert. i'm going to be five minutes late." and for a beat you think "it's funny being late. what is time anyway? oh, forget it. i'm late." for me i want to live more deeply in those moments and this show is to take that flicker of a moment and stretch it and take it longer and get more deeply into it investigate it think about it, dream about it. >> rose: the mobile revolution and "radiolab" when we continue.

s captioning sponsored by rose communications from our studios in new york city, this is charlie rose.

>> rose: paul jacobs is here. she the chairman and c.e.o. of qualcomm. it is the world's largest provider of chip technology for mobile and wireless communication. many of your favorite devices from smart phones to tablets are powered by qualcomm chips. the company has capitalize on the revolution mobile with a vision. it put in place more than a decade ago. today there are over one billion spar phones users around the globe. that number could double in the next few years as consumers in chine and india will access the internet for the first time on their mobile devices. qualcomm is poised to be at the center of that growth and much more. i'm pleased to have paul jacobs at this table for the first time. welcome. >> thank you very much, charlie. >> rose: take me back to your dad, who was an m.i.t. scientist. >> right. >> rose: what was his vision we created qualcomm? >> me had had a previous company before that called linkabit. and he was one of these world experts on digital communication

theor. we all think everything is digital today. back then it was all analog and digital was hard to do. this was all theoretical when it started. and he started linkabit and basically you could do enough computation, and it was sort of expensive enough you could only use it for military and space communication. then he goes on to start qualcomm, and they didn't really have an idea for products when it started. it was just seven people got together who knew the kind of theory, and they said "okay we're going to go on" -- >> rose: and believed it was the future. >> it was definitely the future. but what happened was computation became so cheap they could tuz for commercial and consumer applications. so that really was the start of the company. it wasn't that they thought of that specifically but it turned out that way and now we have these, you know, incredible cell phones that do an amazing amount of computation. >> rose: and where does his sort of stewardship end and yours begin? >> i took over as c.e.o. in 2005, and i took over as chairman in 2009. but the thing that happened between us was that i mostly

focused on mcs of the technology. and heex toed on making the radio link better and better and better. so i was looking at the radio link as kind can have a pipe. and he was thinking i need to make that pipe bigger, fatter more stuff through it. so in 2005, it was kind of the time frame when wireless internet became something that was more mainstream. obviously, things like the iphone really helped break that into people's minds. but that transition happened right around that time. so it was a focus of the company from being a radio technology company to being much broader, all sorts wireless technology, and the application of it. >> rose: you saw smart phones early. >> oh, yeah. i did -- >> rose: or mobile devices. >> we put the internet protocols into cell phones in the early '90ss before people knew what the internet was. and i did a phone with palm very early on, when palm pilots -- >> rose: i remember, yes gee, a funny story, i had an apple

newton at the time, and i tried to do a deal with aptoll put a radio inside the apple newton and make that into a smart phone and they weren't so interested and i went across the street to palm and i was carrying my apple newton and i thought this probably wasn't the best thing but i was using it to take my notes. they had a palm pilot brochure shaped like a palm pilot. i scotch taped it on top of my newton and i put down and they're like, other "okay, we'll talk to you." it all worked out. i believed in the notion of connected devices. i was sitting on a beach in maui and they just turned on the cellular system we created and i had this device with me. and there was an old search engine alta vista. and i typed in "maui sushi." and i got the best soucep restaurant in if maui. these things are dead. the future really is connected devices. this was the end of the 90, '97

'98 time frame. >> rose: now we're on the eve of 2013. where are we going? >> oh, there are a lot of opportunities for us. obviously, the smart phone you know, trend is is going to continue. it's growing like crazy. and now we're seeing pcs really being subsumed by smart phones, whether it's tablets or the fact that microsoft put windows on top of our chips for example. it's become mobile. but then i look out even farther in the future and say this wireless technology is going to be an enabling technology for a lot of other industries. one of the areas we're really focused on is health care. it's such a huge -- >> rose: i find this really exciting. this has to do with sensors and things like that. explean this to us. >> the phone is going to sit at the center of a web of sense of sensors you will have on where you are can of your body. you may have them inside your body. let me tell you something that is pretty cool. there is a researcher we're working with who will put a

tiny, tiny little chip inside where you are bloodstream -- >> rose: inside your bloodstream. >> they'll inject it and maybe lodge in your wrist and it will sit there and look for certain indicators that in two weeks you might have a heart attack. you can imagine that? your phone will ring -- >> rose: it will be able to read the messages. >> two weeks ahead of time that you're going to have a heart attack soap your phone will ring and tell you to go to the doctor. imagine that. >> rose: that's real. >> that is stuff that's in the lab right now. people are working on that right now. >> rose: and the engineers believe in it? >> we believe in it. it's not that insane to think people will have stuff inside their body. i know people with pacemakers, and there have been studies that show if your pacemake ser connected versus nonconnected it improves if mortality rates 50%. >> rose: how does that work your pacemaker is connected -- >> so it can be read remotely. you might have a problem and "i'll go to the clinic or not" and by the time you go, it may be too late whereas if you have that monitored all the time they

can check that out and say, "hey you better come in." there was a thing where you wore the sensors, the kind of sensors when you get your treadmill checkup. they plug this into a piracy p.d.a. there was a guy sit may go hospital bed and they called him up and said "you are looking bad. you need to go to the hospital." and he said, "i am in the hospital." and they said, "call the nurse right away. you really need a nurse." and it saved his life. >> rose: in emerging nations, where they have not had land lines, it oppose up the future by skipping a generation. >> yeah. i mean, it really is. and you see the kind of adoption rates that are going on there, just huge -- >> rose: there are a billion smart phones? >> so, let's just take chine pap there are a billion connections in china right now, and about 27% of throws what i call mobile broadband. why are people using that

stuff? we just did the survey with "time" magazine, and it shows people are using that instead of a computer nape don't have the computer. 84% of people read their news on a smart phone and the u.s., it's less than a third of people interested on a smart phone. >> rose: around the world it's 88%? >> that people around the world-- no people around-- people in china are using it 84% to read the news. and in the united states less than a third. it's just fascinating. these people use it in ways that we think we're advanced in the united states, and yet, in china, in india you see people using it for all these different entertainment and information applications, and they're ahead us because that's the only way that they get access to that stuff. >> rose: it's a huge market for you. >> it's a huge market. smart phones there will be five billion smart phones sold between now and 2016. >> rose: 5 billion in the next three years. >> between 2013 --

>> rose: here's the opening question from-- this is a story in the ""wall street journal" today." qualcomm c.e.o. foresees home base stations. noose what that? >> so this is an interesting thing. right now everybody wants to get all this data on their smart phone and they're upset when it doesn't work that well. the other thing they're upset is they pay a lot to the wireless operator and the wireless operator sometimes doesn't give them as much data as they'd like. and we were thinking we need get 10 to 12 times more capacity. n.t.b. from japan comes in and says we want 1,000 times more. we say 1,000. what are we going to do? it turns out the small cell idea is the idea. you will have these things, the size of a pack of cards. it will cost less than a cell phone because it's basically built like a cell phone but doesn't have a screen or memory or battery and you plug it into the squall it will give you very high data rates. it will also serve the people

coming by outside the house and it turns out that if you just get these small cells into a few people's houses, most of the traffic of the network ends up on the small cells. so you need the big network still, the one that we all use, but it doesn't have enough capacity for all of us to download videos all the time, so most of the traffic goes on to the small cells. >> rose: how much growth is left in the smart phone wave. a lot? >> it's amazing. like i said, five billion-- the growth rates this year-- just the first half of this year, there were 300 million smart phones sold. that was up -- >> rose: 300 in the first what-- >> first half the of the year. >> rose: the first six months of. 2012 300 million. >> that's only 39% of all the devices shipped. so there's still a long way to go. next year the projections are basically half of all phones shipped will be smart phones which is really amazing. when i was running the handset business in the early days of qualcomm you were lucky if you could sell 10% of high-end

phones and now everybody wants these things. >> rose: what's the place for tablets in all this? >> well tablet, that's the next thing. everybody is interested-- obviously the ipad is one really selling well but there's a lot of competition coming whether from google tablets or as we talked earlier, microsoft tablets are come along. there's a lot of focus on that. we're doing a lot of cool things with it, whether the health care stuff we talked about, but also education. we're working with various companies to try and get tablets into the schools so that kids will learn in a school the way that they learn at home. they use rich media. they click. they get more information. i mean, being an engineer, i always think it's strange that i have a physics textbook where they show me an experiment and it's just kind of drawn on a piece of paper whereas you take a tablet, that thing will be live. i'll be able to play around with it and see how things react and so forth. i really think there's a huge opportunity. we have to deal with the fact that kids might drop their

tablets and break them. we have to make them robust and get the right curriculum. >> rose: one tablet two tablets, or 100 tablets emerge? >> i think somewhere between two and 100. i mean there's a big world up on the there. so there's lots of other place where's people are trying to drive -- >> drive-- it india's got a government project a very low-cost tablet. turkey has an education tablet project. governments are getting involved particularly in the education space. so i think you're going to see a lot. actually, what's going on that i find fascinating, also, is just the degree of innovation. your p.c. looked the same for decade-- you know, decades maybe a decade and a half. it was this black thing. now you have all these tablets coming out and you see different size shapes. my wife carries a thing called a thablet, halfway between a phone and tablet.

she likes it because it's a bigger screen and she can stick it in her purse. we're gog see an amazing amount of innovation going on. >> rose: your business will be developing better and better and better processors. was in earlier stage it was intel that drove the business by developing better and better processors. >> right, so in the case of a mobile device, though a processor is more than just doing computation. it's also doing the connectist into the network, so the radio piece of it is there. and then we also emalate game consuls. there are really good graphics capabilities. and you also have to process your voice or do the multimedia stuff. so there are dipping tap process nors there. there's connectist like wifi and blue tooth. our claim to fame is we integrate more things into one piece of silicon than any of our competitors do, and that's what allows us to be the most successful and we're number one in terms of weiss chips.

>> rose: how important to your success has been your relationship with apple? >> oh, it's been very important. they're a great company. they really did a lot of work to popularize the notion of the wireless internet. like i said, we were putting the internet protocols in the phone in the early 90s but it wasn't really breaking through to the mainstream. and -- >> rose: what caused the breakthrough? >> i think, you know, apsell an amazing marketing company. they did that. they made some user interface things they did -- >> rose: the iphone perhaps was the driving force 20 expansion of mobile? >> it was happening but i think that was helped the curve really ramp up. and it raised the bar. people were obviously building smart phones all along and doing this. but i do think-- you know steve jobs had a way about him to really get in the mind of the consumer and popularize things. so they did that. and we had been doing things-- we built an app store in the early 2000s.

verizon still sells applications on your fepture phone through qualcomm's app store. but it didn't really transcend and get in the mainstream. >> rose: we all know moore's rule. what's the rule about the acceleration of processors today. >> moore's law is a very interesting thing right now. we can see just a if couple of generations out of the process technology where it's not clear that you get the economic benefit anymore. what happens is -- >> rose: you don't get the economic benefit-- >> a couple generations from now. which by the way are happening very fast. we'll go through new process technologies in the chip side upon, you know a new one everyone year basically, year, year and a half. so we where getting to the point where you can see out there, there might be a problem. we might not be able to get all this economic benefit, which there's a lot of value creation in the world based on the fact that chips keep getting cheaper and cheaper and have more and more functionality in them. hopefully, smart engineers will

come about and fig outer this is how we're going to get that next step and get the cost down. but right now it's a little worrying. we do lookute and say a couple of more generations, it's definitely getting tougher. >> rose: don't you make your own smart phone? >> i did that in the past. it's-- that was a tough-- tough business. >> rose: everybody else is doing it? i asked jeff he's thinking about it without saying he'll do it. but you've got google has gone and bought motorola. so-- >> well, you know so we really are a horizontal enabling company. we want to build our chips and work with the broader -- >> rose: do you worry about cannibalizing your sales? is that what it would be? >> no, i worry about sis suede, my partners for working with us. there was a time when qualcomm had a handset and chip set business and all our customers believed we were keep the the best stuff for our own handset business. our handset business was not

profitable. we were learning our way back then. there was a time where we thought we had this phone where we were going to make all the money and one of the korean manufacturers came in is and dropped their prices at the end of the quarter and all that money went away. and woo & we said why are we beating our heads against the wall to do this? our partners do it better than us. we create the technology better and we create the chips better. let us focus on what we were good at. let them focus on what they're good at, and we're all happy. our values are let's innovate, execute-- deliver the things we told people we were going to deliver-- but the third value is partner. qualcomm doesn't sell directly to the end user. >> rose: how much of your annual revenue comes from licensing? >> oh, it's-- actually so 60% our revenues are from the chip and about 35% of the revenues are from the licensing business. but if you look at the profitability, it's kind of flipped because the licensing business isn't very high-margin

business. on the other hand -- >> rose: that's in terms of growth, right? >> it takes a lot of r&d to create that. we're spending a lot on that. what we try to do is deliver all these innovations to the entire industry and that's yet license business is so good. we have 220 companies we have licenses with glgz gl in addition to what we talked about in terms of sensors on your body that will tell you what you should do, where else? jeff emmel was here and everybody's looking at how to collect and analyze data. i mean, there's a wave of the future that's it. >> absolutely. so there's going to be hundreds of millions of sensors and connected devices in the world around us. >> rose: looking at everything and taking the temperature of everything and reporting back to a big brain which will assess it. >> it will report back to your phone. >> rose: which is a big brain. >> that is true. they're getting bigger and bigger for sure. what i think is going to happen is the phone is going to be this thing that merges kind of

cyberspace around us and physical space. i'll walk into an environment and there might be content available, say a media-- some show that got recorded and i want to download that. opener there might be a screen, and the screen might be able to talk to my phone and say, "i'm a screen. here's the resolution. here's how you talk to me. here's the protocols i support." and the phone says "here's a content and i want to show it." or it might be speaks a cash register, a scale-- all these kinds of things that a phone might talk to. just like you said on the industrial side, all the air conditioning and heating and controls for the lighting and all that kind of stuff. you'll be able to have the phone talk to those things and wander through the environment. it will even work for people. you'll come in contact with other people and their phone might be bring out something your phone picks up and vice versa. and whatever information up to the share with me, or i want to share with you you'll have it

automatically. i walk into a room and can't remember "dimeet that person before? when was that? it's possible in the future, these things will just talk to each other. and they'll talk to all the things in the environment around us too. that will happen pretty quickly. >> rose: it would be unfair of me to divulge this because for people who are fans of "momentland" there is a circumstance in which you see an episode involving shutting down somebody's pacemaker. >> yes. >> rose: is there a risk in terms of people having all these sensors that somehow they may communicate the wrong information or they may be. -- either inadvertenceulently or-- >> there's no question that there's an opportunity in any electrical system any computing system for things to happen. now, in health care systems there's generally a lot of redubbeddancy in those systems because they build them that way, so i think there's less risk in that case. it is absolutely a focus of the industry to build better and

better systems to deal with cyber security threats and we all know hackers are out there and they will do things so you really need to spend a lot of effort to make sure you can stay one step ahead of what's going on there. and the industry really does focus on that. we put a lot of effort into hardware that goes into the chip set. we put a lot of effort into testing the software very very thoroughly to look for things. it is schaaf a cat-and-mouse game. so you need to make sure you have a lot of redundancy in those kinds of mission critical systems. >> rose: you are going to be the primary key. ♪ speaker at the consumer electronics show. that's a role big leaders in the industry have held people like bill gates and steve jobs and people like that. what do you have to do-- what is it that you want to explain and say to these people who know a lot about technology at this moment in time? >> i really want to project where the future's going to go because we need people in the

consumer electronics industry to work with us to fulfill this vision of the phone wandering through space and talking to all of these different devices around you. so we're going to talk to them about things like where is mobile computing going? where are smart phones going? how are we going it deal with this data demand that's so hume and so forth? and this notion they talked about, this digital sixth sense the notion that you'll add an extra sense to your perception of the world around you which is the perception of electronic cyberspace, things associate with the world that's around you, and that goes along with all the stuff we've been talking about, whether things in the environment, things on your body, things in your car. and we're going to have i think a pretty interesting discussion about that. i have a lot of great guests that are going to come up and show really interesting things and i think some surprises. so it's going to be fun. >> rose: what are the dates for this? >> january 7, i think, the evening of january 7. it's right before

c.e.s. starts. >> rose: what could go wrong in the future that you've laid out gimean, if you have over it-regulation, for example. india is a perfect example where they had to get spectrum allocated and in fact operators put money into building these networks out, and then the government came along and said, "oh, no, these licenses they really weren't grant the right way," and they've created this whole issue of. do i actual-- can i actually transmit on that spectrum? i can run my service. the issue of regulation, the issue of not having enough spectrum available can harm us. there's more fundamental -- >> rose: is somebody addressing that? is the federal government addressing that? >> absolutely. the f.c.c. is on top of that and we've been talking with them about ideas how to free up more spectrum. the home base model that we were talking about, you can use

spectrum fair big system you can use in your home more easily and it turns out there's more spectrum available there so you can get higher data rates and be more efficient. we've been working with the f.c.c. on those kinds of ideas. they've talked about alicate a very specific band for these kinds of base stations and i'm really excited about that opportunity. >> rose: do we need a broadband policy in america? >> i think it's working quite well. i don't feel the need for an industrial policy where the government comes down and they say thou shalt do this and this and this. things move extremely fast in this industry. the people in the industry, the companies can in the industry are very very momentivated to continue to drive-- whether it's more bandwidth more functionality in the device, more services. you can see what's going on already. people are excited by it. so you already have a lot of things going. now, people question will you guilt the coverage in the rural areas, for example? but there are companies working on that as well. so all of these things tend to

work themselves out as long as the fundamental things are done, like good spectrum policy, good policy that this intent vise investment and infrastructure. themselves to kinds of things are the important things for the government to get involved with. i don't think we need the government to choose winners and losers in losers in technology. >> rose: i've talked to bill gates about this many many times, if in fact he was a teenager today where might he want to go, what might he want to do? he will give you a reasoned argument that while souter science was the thing to do when he was at his age and saw it early and had opportunities and therefore, dropped out of harvard to work with paul allen, at the same time we are looking at a whole expansion in terms of bioissues. it's extraordinary development but it seems to me that the twicesthe devices that technology is delivering to us

go hand in hand with that, health insurance us reach into the brain to understand how this organ works and to make the connections not only to it all the things that we are about, what it means to be human and all those big questions. >> i agree with you. >> rose: one is essentially tied to the other. >> no, i agree with you. and i've had this conversation with-- i have a son going to m.i.t. as a freshman. and i said "are you going to go into electrical engineering bio-engineering?" electrical engineering is great because it gives you a foundation. but i agree with you wilogical science is interesting. san diego where we're based is a focussal point. we have telecom there because of us and other companies companies and we have great sciences because of a number of places really world class in life sciences. one of the projects we have a very far-out project we have in our lab came out of

neurosciences institute in la jolla as well where some scientists figured out how to build a model of the neuron that's computational very efficient, meaning you can do this. >> rose: work the model of the neuron. >> and we put them together and create a retina and create the cells that go behind a retina and if i show it a picture it says that's interesting it's not interesting, and it can follow things around. we didn't program it. we just taught it. it's very fascinating and it works the way your rain works. the neuron sends a little spike and it trastles a certain amount of time and gets to the next neuron and there are spikes that all come together and when they add up another spike comes out. that's how your brain works inside and we're modeling that. >> rose: how close are we to artificial intelligence? >> it depends how you define that. so there are things right now that people used to define as artificial intelligence in terms of speech recognition, playing chess, all those kinds of

things. i think the broader question is, do these things-- is consciousness an emergent property? does it actually become fully intelligent and aware the way we think of them? it's kind of science fiction like. ip don't know the answer to that question. but i do know that we're building things that are modeling the way that your brain actually works. so we have ray robot with a camera on it and it actually does the vision and motor control system. if you're standing there and you move tlooks at you like a bird almost. so we're seeing things that look very biological. so where does that go? it's very hard to tell at this point. >> rose: when you look at the internet and you think of all the contributions that were made by government-sponsored research is the private sector prepared to take that responsibility? can it take that responsibility? >> i think the private sector can do its piece, but you see, look at our research universities, which are the best in the world. most of those are being funded by federal grants.

>> rose: right. >> and a lot of times companies, were so pressured on short-term earnings, many companies hollow out their r&d -- >> rose: meaning they cut it out? >> yeah, they cut it out. you look at a company like qualcomm. we can afford to invest for very long-term bets so we do, but there are not that many companies able to do that. un google does a very similar thing. they invest for long term, microsoft does it. look what happened to bell labs. bell labs is a shadow was what it was. it's a private sector thing poopts very scary. i think there is a huge place for the government in that, but not necessarily making all of choices, but providing the infrastructure so that great researchers stay in the united states and they do the research and they contribute that to the general knowledge. because a lot of incredible things have come out of government-sponsored research. >> rose: it's great to have you here, paul jacobs, c.e.o. of qualcomm, thank you. >> thank you. >> rose: pleasure.

>> jad abumrad and robert krulwich are here, cohosts of "radiolab," devoted to ideas such as space, time, and mortality. it it's said they have digested all the storytelling and production tricks of everybody in public radio before them invented some slick moves of their own andeated the rarest thinyou can create in any medium air, new aesthettic. here's a look and a listen inside "radiolab." >> i'm gathering that from that point forward you began to discover that these algorithms were everywhere in the market. >> yes, and growing. >> what are some of the algorithms algorithms and what are some of their strategies? >> the reason it turns on actually is because it gets there, brings a bunch of friends over and there are a whole bunch of molecules.

>> you are listening to "radiolab"... lab... lab, from... ynyc. >> it's a show that asks to you look around, and when you care seriously about something, to look deeply and go all the way in. >> i want to understand as bestaise can how this works. >> there are these kinds of multiple layers. >> what is the question you would want to know? >> and the sound, the music the theater is one way of kind of announcing that multiplicity. can. >> it activates the release of adrenaline and nora, dredge lin. >> he says those two chemicals kick off certain hormonal systems. >> it has to feel somehow intimate like two people chat at breakfast and sewer realistic and imaginable. >> the golfer hits the ball down the fairway and the ball lands on a particular blade of grass.

if the blade of grass could talk the blade grass would say, "oh, my. what are the odds that that ball out of the all of billions blades grass-- >> me! it lands on me. >> you start with a lofty idea, and start solo on the ground in such an unusual and special place, you make people's tongues fall out of their mouths. >> that's awesome! >> often we don't know until we're really far down the road investigating something what's going to work for a show. >> ... a couple of takes clearly putting robert in the room with them would work well. >> we have an expression where some subjects get so hard and so dense and so difficult, you think, how am i ever going to get out of here? >> the protagonist of the movie is not the peanut butter or blanket. it's the cleaning lady that comes in and wipes the peanut butter up. >>