Scenes from the Qualcomm Shareholder Meeting: Five Years Under New Management

3/9/11Follow @bvbigelow

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new management and an opportunity to rattle us. We really weren’t set up to litigate that big of a global war.”

Qualcomm reached a comprehensive settlement with Broadcom in 2009 that ended all litigation, after agreeing to pay the Irvine, CA-based chipmaker $891 million without making changes to its technology licensing business model. (The company’s lawyers also got a black eye from sanctions issued in the case in 2008 by a San Diego federal magistrate, who rescinded the sanctions last year after determining that her previous findings of misconduct during the Broadcom litigation were not deliberate, but instead resulted from “an incredible breakdown in communication.”)

Paul Jacobs

Jacobs didn’t say anything more about Broadcom, although he did mention that past “attacks” by competitors have eased. In fact, he noted that Qualcomm has been working closely with Nokia on developing technology for their high-end mobile phones that use Microsoft’s Windows 7 operating system.

The Qualcomm CEO, who succeeded his father as chairman in 2009, also acknowledged that the wireless giant also stumbled with FLO-TV, its mobile television service that is scheduled to be shut down later this month. “It was a good risk to take, but at the end of the day, people were not willing to pay that extra amount for cable TV that was already available in their homes,” Jacobs said. All is not lost, however, since Qualcomm has agreed to sell its FLO-TV wireless capacity to AT&T for $1.93 billion—and Jacobs said Qualcomm also has been developing technology to will help AT&T use its newly acquired spectrum to offload certain types of traffic on its network.

Such setbacks, though, seem relatively minor when cast against the backdrop of long-term growth that Paul Jacobs sketched for shareholders. He identified the migration from 2G to 3G devices as a major growth driver for Qualcomm, along with the proliferation of smartphones, tablet computers, USB modems, and other devices using Qualcomm chipsets. With more than 100 new smartphone models introduced during the first half of 2010, he said mobile devices are shifting increasingly from something you hold against your ear to something you hold in both hands as you play games, respond to e-mail, and browse the Internet.

He also charted the growth in wireless connectivity among devices that aren’t mobile phones at all, but televisions, printers, and game consoles. Qualcomm hasn’t sold its chips into such markets before, Paul Jacobs noted, but with Qualcomm’s $3.1 billion acquisition of San Jose-based Atheros Communications, the company can expand its technology into new access points.

“In the end,” he said, “what makes us do this so well is our ability to integrate into a host of different devices.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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