QUALCOMM is one of the best managed companies in the world. One reason is that QUALCOMM realizes that decentralized management through several companies, rather than a single monolith, creates flexibility, less bureaucracy, and greater sense of entrepreneurship. When you combine smaller companies into a big supercompany, such as Worldcom, what do you get? High paid executives awash in their own self interest, lots of debt, and a sense of control---but not necessarily increased profits!
There is a model here for what QUALCOMM is doing. Thermoelectron Corp., founded by George Hatsopulos and colleagues, has been doing the very same thing for at least 20 years. They create new technology, get it going, spin it off into a new company, and then do it again for another company. The model has been praised in articles published at various times in the Harvard Business Review.
The point is that not only does QUALCOMM create problems with competing systems when it stays together but it loses some of the creative juice and entrepreneurial spirit that has worked so successfully in the past. It's the right strategy, to make an obvious understatement.
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