Great post; the world has changed and previous success does not guarantee today's success when chip design has become commodity.
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Few things attributed to qcom's this sad state:
1) The other companies have caught up and thus wireless chips are now heavily commoditized
2) With pricing now the differentiating factor, this is a race to bottom
3) the value is shifting towards the upper layer leaving little margin for chip manufacturers. Even with IOT, the margins would be thinner. Yo can't put an expensive chip in a bulb, right ?
5) qcom did't realize this and thus did not develop the whole ecosystem
6) inefficiencies, nepotism, favoritism, bad/useless employees were always there. But now these people are under scrutiny hopefully because of $$ pressure
7) qcom really needs to shake things down starting from top to bottom. IN essence, they need to cut expenses and the most expensive thing in qcom is head count in SD
Don't really blame qcom a lot, it is a natural progression of biz.. and qcom could not prepare for it properly.
Does this mean Sorrento Valley is going to look like Greece?
That's why thousands of layoffs suggested in this site are inevitable.
Anonymous118816, make headcount equal. Bye bye Sorrento valley traffic woes
Q does not own the entire ecosystem like Apple, Samsung; also how is Q going to compete on price against mediatek?
Qcom was one trick pony and they failed miserably in other things...this is bloated company on death bed.
I want to be Gantt chart warrior too! Coding is for suckers
Anonymous118684 summarizes it nicely. For the past several years, the only way to advance in the company has been to 'manage' your career. Your technical contributions & merit did not count didley squat. Those who can actually produce have been relegated to bottom rungs to be ridden over by hordes of middle managers. The price is due now, but what do these managers care. They got their promos/stock/bonus etc... and will move if laid off to carry on their merry career managing somewhere else. That is how it works unfortunately in big companies.
Anonymous118745: Exactly. I was explaining exactly WHY the Atheros acquisition was such a failure. Q paid $3 billion for the people from Atheros, and then proceeded to insult them so that the reason for their $3 billion acquisition walked right out the door.
If you are not happy working at Atheros, GTFO; nobody is asking you to stay.
Anonymous118699: What would you do if you were getting, say, 100 shares a year in stock grants, vesting over 3 years (such that you always had about 300 shares unvested), and after the acquisition, you were only getting 15-30 shares a year? What if this came against a backdrop of hearing the board brag about record quarter after record quarter in the first 2-3 years after the acquisition, and you saw the board members paying themselves over 10-20 times what the Atheros board was paying themselves? What would you do after your stock grants given by the old company fully vested?
Anonymous118684. why Atheros acquisition has been a failure?
You got it right 118684, too many middle managers with no real work.
Where are all the big backnforth decisions coming from?
I see two main causes. One issue is the inability of upper management to have a vision for growth and maintain relevance in the market. They successfully harnessed the huge tide of smartphone growth over the last few years but now that it's slowing down and competition is catching up, they are completely stumped. All attempts at growing in new markets like mediaflo, mirasol, health etc have failed miserably or haven't gone anywhere. Atheros acquisition has been a failure leading to many people leaving and products doing badly. The only good things are the patent revenue stream and modem. Everything else has been terrible.
The other major problem is the recent culture of bloated middle management where only the people at the bottom of the pyramid (engineers, sr. engineers) do any real work and everybody else is 'managing' or 'directing'. Good engineers who have become managers/directors do not use any technical skills and have become paper pushers. Upper management does not reward middle managers for their technical work but only based on their bureaucratic skills. Companies like Google and Apple have a flat structure where everyone actually works.
board and sm had no guts to throw out the lead from this falling balloon
give mr full control he has the balls to set things right and get us back on track