Qualcomm's Battle-Tested CEO Locks In on 5G
October 07 2020 - 8:29AM
Dow Jones News
By Asa Fitch
Few companies in American corporate history have fought as many
high-stakes battles as wireless-communication chip giant Qualcomm
Inc. has in recent years.
It has been a trying period for Chief Executive Steve Mollenkopf
that has given him at times a front-row seat to the intensifying
tussle between the U.S. and China over tech leadership.
Since Mr. Mollenkopf's appointment as CEO in 2014, Qualcomm has
defied calls from an activist investor to break itself up and seen
its proposed $44 billion acquisition of Dutch chip maker NXP
Semiconductors NV thwarted by scrutiny in China. It also was the
target of a $117 billion hostile takeover by rival Broadcom Inc.
that President Trump nixed in 2018 over national-security
concerns.
On top of all that, Apple Inc. and the Federal Trade Commission
sued Qualcomm in 2017, alleging that the way the San Diego-based
chip maker collected royalties from patents on key cellular
technologies was anticompetitive -- a legal fight that threatened
to force it to renegotiate lucrative licensing deals at much
less-favorable rates. Qualcomm settled its differences with Apple
and prevailed against the FTC on appeal in August.
With most of those troubles now in the rearview mirror, Mr.
Mollenkopf is focused on capturing the market for chips that go
into superfast 5G networks and smartphones. At his home office in
San Diego, he recently sat down -- virtually over a Microsoft Teams
call -- with The Wall Street Journal. Here are edited excerpts from
the interview:
WSJ: What's the biggest lesson you've learned from the
challenges of the past few years?
Mr. Mollenkopf: You have to develop your own opinion on what you
should do. You'll get a lot of advice, but ultimately you have to
have conviction in what you're going to go do and go do it. And it
will be more difficult than you think to follow that path.
WSJ: Why is it so difficult?
Mr. Mollenkopf: I've been at Qualcomm for a long time [since
1994], and so I felt a responsibility. Probably in San Diego County
we're one of the largest employers. So you have that burden, and
that actually is, to me, where the stress comes from.
WSJ: How did you keep staff motivated during it all?
Mr. Mollenkopf: We compartmentalize. Everybody's affected
because they're part of the company. But in reality you have a very
small number of people who, on any given day, are actively trying
to solve the issue. I would spend a lot of time just telling
people, "Look, you can't do anything to help me or us resolve this,
except to produce great technology." And that's what they did.
The thing that is really important for CEOs -- and it is
absolutely a trait of tech CEOs, by and large -- is that you just
have optimism. If you didn't have that, you wouldn't be in the
industry.
WSJ: With those crises behind you, what stresses you out
now?
Mr. Mollenkopf: We've really got a great opportunity with where
5G goes. Let's not blow it. [When the pandemic struck] my view was
that the mortal sin is to not be prepared for the opportunity on
the back side of this.
WSJ: How is the rollout of 5G networks and 5G smartphones
progressing?
Mr. Mollenkopf: If you look at the U.S. and China, it's very
good. In the U.S., the average consumer isn't seeing it all the
time now, but their phones have already made the decision to do it
and it's coming. With the combination of Sprint and T-Mobile,
you're going to have three well-capitalized companies [along with
AT&T Inc. and Verizon Communications Inc.] who really now
understand the future of the internet is wireless.
There are parts of Europe that are going a little bit slower
than we expected, but on the whole it's good. China's rollout has
really accelerated since Covid. I don't know whether it was
conscious, but it definitely seems to be that way.
WSJ: What are you most excited about technology-wise?
Mr. Mollenkopf: Subsequent releases of the 5G standard are
positioned for use outside of cellular networks. I'm really excited
about them transforming industries. The next big industrial
companies are going to be the ones that figure out digitization.
And this is trillions of dollars of market cap. It's great to have
the key technology that enables that.
WSJ: How do you innovate during a global pandemic?
Mr. Mollenkopf: The key thing is to make sure you're prepared
for this big bounceback that's going to happen. That's what I call
the opportunistic stress. We have to make sure, when we look back,
we didn't squander this great opportunity we had.
We look at 5G and say this is a once-in-a-career-type expansion
of the cellular road map into other industries. Let's make sure we
not only have the technology right but we have the business model
right and the partnerships right.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
October 07, 2020 08:14 ET (12:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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