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As a top U.S. telecommunications and hardware player, Qualcomm's silence is somewhat disturbing

At the close of Qualcomm Inc.'s (QCOM) Monday 2014 Computer Electronics Show (CES 2014) keynote I asked Qualcomm's new CEO Steve Mollenkopf a question that's of keen interest to foreign customers -- how can Qualcomm's technology be trusted in light of recent revelations of companies appearing to assist the U.S. National Security Agency (NSA) to spy not only on Americans, but on business leaders in ally states such as Brazil, Japan, South Korea, France, and Germany?

The CEO gave me a pretty boilerplate nonanswer.  He stated:

I think if you look at Qualcomm's technology you will see that we're among the leaders in the industry in security.  But as for what the government is doing we can not comment on that.

A Qualcomm representative took my card and promised to email me a followup comment.

Qualcomm Mollenkopf
Qualcomm CEO Steve Mollenkopf at his company's CES 2014 keynote

I understand the hesitancy of tech leaders to go on the record and comment on NSA spying.  While there are some notable exceptions of course, such as Oracle Corp. (ORCL) CEO Larry Ellison who happily opines his support for domestic spying and Google Inc. (GOOG) Chairman Eric Schmidt who calls spying "not ok", most leaders are likely fearful of reprecussions in terms of government contracts and taxation, should they voice negative thoughts on the U.S. government's spy programs.

On the other hand it's too important and financially costly an issue to suffer in silence.  The NSA spying is expected to cost the IT space $21.5-35B USD (according to the Information Technology and Innovation Foundation (ITIF)) over the next three years, due to damaged trust in the international community.

We've already seen one such high profile loss -- Brazil's national government shot down a bid by The Boeing Comp.'s (BA) for a $4.5B USD jet fighter contract.  The F/A-18 Super Hornet was formerly the front runner for the contract according to Reuters.  Now the update to Brazil's jet fleet will go to Swedish jetmaker Saab AB (STO:SAAB-B) who will provide the South American nation 36 new Gripen NG fighters by 2020.

As embarassing leaks continue to accelerate we may be looking at an even more massive loss of business for the U.S. electronics industry than previously expected in terms of foreign sales.  The U.S. leads the world in electronics, but there all alternatives.  The market will likely choose to take those alternatives -- at least in terms of corporate IT and government contracts -- if U.S. tech is suspected of containing back doors for NSA malware.


Qualcomm SnapdragonAs a top provider of processors for mobile devices and basestation technology, Qualcomm needs to clarify its thoughts on NSA spying and how it plans to protect its customers.

For that reason I feel it is a vitally important for any U.S. company involved in telecommunications -- be it on the hardware or software side (both of which Qualcomm is involved in) -- to provide a clear and considered response to such questions.  If they do not, any lost business will be on their backs as much as on the policies Americans and Congress unwittingly allowed to fester and grow, fertilized by national security fears.

Sometimes it makes sense to have such a response come from a legal team that can offer up a clear statement of the company's perspective on the issue, while avoiding unnecessarily inflammatory language.

In that regard, I hope to hear a more in-depth response from Qualcomm's PR/legal team shortly.

[Qualcomm's keynote was at noon at the Mandalay Bay Convention Center in Las Vegas, Nevada.]


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By Etsp on 1/6/2014 5:58:53 PM , Rating: 5
Do you think it's possible that it was the CIA's inability to do that with Huawei's products that caused the administration to start pointing the finger at them?

That whole "Huwei has ties to the Chinese military, you shouldn't use their products because the Chinese will spy on you." I mean, that's a classic misdirection right there, accuse someone potentially innocent of the crimes you're actively committing.


By Solandri on 1/6/2014 7:38:11 PM , Rating: 5
What makes you think China isn't doing the same thing with Huwei? While the NSA probably has one of if not the most sophisticated programs, I expect most of the world's governments (including China, Russia, the UK, France, Israel) have similar programs, and laws to keep their commercial "partners" silent about it.

Just because it's trendy to paint the U.S. as the bad guy doesn't mean everyone else is a good guy.


By superstition on 1/7/2014 8:14:11 AM , Rating: 2
tu quoque


By Monkey's Uncle on 1/7/2014 12:35:56 PM , Rating: 1
Excellent and totally valid observation.

Any gooberment currently in power will do everything it can get away with to expand its own power and control over its populace.

Any incumbent to that position will do exactly the same thing if they get the chance.

Any alpha dog will do everything it can to consolidate his control over the pack. So give Obama a pat on the head and toss him a milk bone. He is doing exactly what anybody can expect an alpha dog to do.


By superstition on 1/8/2014 10:58:06 AM , Rating: 2
The fact is that there are very different governments that have occurred in various places. They are not all authoritarian police states to the degree the current administration wants.

Technology, though, is making it much easier for governments to dominate people -- must easier to create police states. However, as we saw with the Arab Spring, it can work in the opposite direction with enough pent up anger.


“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls














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