Qualcomm Inc (QCOM)

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Qualcomm’s New Era Begins

20th Anniversary Bash Heralds July 1 Jacobs Family Transition
By BRAD GRAVES

San Diego Business Journal Staff

http://www.sdbj.com/article.asp?aID=74891019.2387301.1161017.6081926.8322638.600&aID2=89300

Paul Jacobs isn’t afraid of a little humor at his own expense.

Looking back to the day the board of Qualcomm Inc. named him chief executive of his father’s telecommunications company, Jacobs offered several hundred people at a recent San Diego Telecom Council gathering his most vivid memory of that meeting.

The board had just made its decision. One of the directors, retired Air Force Gen. Brent Scowcroft, who had been a counselor to U.S. presidents, approached the youthful looking Jacobs, patted him on the back and softly delivered four words.

“Don’t screw this up.”

The way Jacobs tells it, the line was delivered lightly — but with a little bit of a sting. Jacobs put a flabbergasted look on his face, and he drew a laugh out of his audience.

July 1 is the day Jacobs takes over as chief executive of Qualcomm. He succeeds his father, Irwin M. Jacobs, who will remain chairman of the board.

The father-to-son transition may be more typical for a small family outfit. It is unusual for a publicly traded U.S. company, an enterprise that occupies No. 398 on the Fortune 500 list, has close to 9,000 employees, and brought in $4.9 billion in revenue during its 2004 fiscal year.

But the Qualcomm board insisted in March, when the transition was announced, that Paul Jacobs is the right fit. And now Jacobs says he’s ready.

“I’m so psyched about my job,” the younger Jacobs, 42, told the gathering. “The company’s got an incredibly good strategic position. We’ve got to execute on it.”

Jacobs showed a similar exuberance at Qualcomm’s 20th anniversary celebration June 21 at the company’s namesake stadium in Mission Valley.

The playing field of the stadium looked like a giant club, with several thousand employees and their guests seated around banquet tables. Mushroom-capped gas heaters were stationed at intervals to warm the crowd, and an elaborate stage supported the San Diego Symphony.

Paul Jacobs said the company grew with the help of people and “idears,” pronouncing “idea” with a nod toward his father’s East Coast accent.

“We are just getting started here,” Jacobs told the several thousand employees in attendance. “There are so many possibilities ahead of us.”

This is a very emotional evening,” said 71-year-old Irwin Jacobs, telling his employees it was the last event where he would preside as chief executive.
Entertainment for the evening ranged from the symphony and the San Diego Children’s Choir to Natalie Cole. Cole’s concert, however, didn’t begin until the younger Jacobs lit off a round of fireworks.

Like his father, the younger Jacobs has a doctorate in electrical engineering — though his is from UC Berkeley, while his father’s is from the Massachusetts Institute of Technology.

The younger Jacobs has been with Qualcomm for 15 years.

His early work focused on speech compression techniques for Qualcomm’s signature technology, Code Division Multiple Access, or CDMA. In 1995, he was appointed to run the company’s handset and integrated circuit division. Under his leadership, the company’s consumer products segment worked on phones incorporating the Palm operating system and global-positioning technology. He also helped develop BREW software technology, which allows people to download applications to their phones, and the business model behind BREW.

Again, the younger Jacobs wasn’t shy about telling the Telecom Council about some trial and error.

Jacobs said he had wanted a catchy name for the software — maybe something that had overtones of magic. His original name for the technology was Q-Wiz (“kind of like Cheez Whiz,” he said). But then, he said, he started thinking along the lines of what witches have in their kettles, and he proposed BREW.

The software developers who were with Jacobs laughed. They were thinking along the lines of beer.

But they had hit on something short and catchy, and the name stuck. “I don’t think BREW would have been successful had it been Q-Wiz,” Jacobs said.

Part of his preparation for the CEO’s job, Jacobs said, has been a round of visits with Qualcomm customers. “We had a worry at one point that we were perceived negatively in the market,” he said, adding that the point of his visits was to listen and emphasize partnership.

Qualcomm makes cell phone microchips, licenses intellectual property related to cell phones and provides a line of other telecommunications products and services.

The company’s most recent earnings forecast is for fiscal 2005 revenue in the range of $5.5 billion to $5.7 billion. The company will likely update that forecast July 20 when it releases quarterly earnings.

July 1 marks another transition at the company: President Tony Thornley, 59, will retire and make way for 43-year-old Steve Altman, who is a Qualcomm executive vice president and president of Qualcomm Technology Licensing.