The head of Qualcomm (QCOM), Paul Jacobs, has worn out his welcome. His father founded the company, so it may be hard to get him out. But, the board has to consider the record. Jacobs has always said that he should be judged by results.
Shares in the company have gone from $53 in May of last year to $43 today. Most of the fall is based on poor decisions by management.
Qualcomm has decided that its IP portfolio is so strong and its position as a provider of circuits and software for handsets so dominant that it can force is licensing terms onto the industry.
But, recently, that method of running the company has been a failure.
Qualcomm has been in a series of disputes with its largest customer, Nokia (NOK) for some time. Nokia thinks Qualcomm’s licensing fees are too high and that the US company violates some of its intellectual property. It is hard to believe that Qualcomm’s CEO has decided to move the fight into the public forum, but he has. If Nokia prevails in some of its antitrust and IP violation claims, Qualcomm could be badly damaged.
Qualcomm has also made a point of going to court as often as its can with rival Broadcom (BRCM). The two chip companies have been fighting over IP rights and recently the ITC decided that Qualcomm did violate some of Broadcom’s patents. The body said that handset companies could no longer import certain new models with Qualcomm chips. The news almost certainly alienated manufacturers like Motorola (MOT) and carriers like AT&T (T) Wireless. They need the new handsets to keep sales moving.
Qualcomm was dealt an extraordinary blow yesterday. The company had assumed that it could get Bush to overturn the ITC ruling with lobbying help from handset and cellular companies. Verizon Wireless broke ranks and will license the Broadcom IP directly which undermines Qualcomm’s leverage to get the decision overturned. Verizon will pay $6 per phone.
It is also an acknowledgment that the industry is beginning to accept the fact that Qualcomm’s IP infringes on Broadcom’s.
Jacobs has decided that litigation trumps negotiation. He has been unusually consistent in that. Now he has made enemies of his customers and the cellular service companies. And, he has lost most of his legal battles.
The company needs someone new to mend fences.
Douglas A. McIntyre can be reached at [email protected].
Travel Cards Are Getting Too Good To Ignore
Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.
We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.
It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.
We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
