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Qualcomm Founder's Son to Assume Control of Company
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Qualcomm Founder's Son to Assume Control of Company

Business

Qualcomm Founder's Son to Assume Control of Company

Qualcomm Founder's Son to Assume Control of Company
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Irwin Jacobs, co-founder of the cellular technology company Qualcomm, is turning over the reins to his son. Jacobs built the company with modest ambitions, but ultimately proved successful both in creating technology and marketing it.

RENEE MONTAGNE, host:

On Mondays, we talk about the business of technology, and our focus today has a familiar ring.

(Soundbite of ringing cell phone)

MONTAGNE: About half the cell phones in the United States rely on technology developed by the QUALCOMM Corporation. The San Diego-based company turns 20 years old this month. Co-founder Irwin Jacobs marked the occasion by stepping down as CEO. NPR's Scott Horsley reports.

SCOTT HORSLEY reporting:

This is Irwin Jacobs' second retirement. The first one 20 years ago didn't take. The one-time engineering professor retired from his first start-up, the Linkabit Company, in 1985, having sold his stake for $25 million. Three months later, he was restless. So Jacobs and a half-dozen colleagues started a new company with no particular product in mind, just an interest in wireless communications.

Mr. IRWIN JACOBS (Co-founder of QUALCOMM): I told my wife that this was just some way to keep one's hand in the business, and perhaps we'd find something interesting to do. And if we were really successful, we'd grow to 100 people

HORSLEY: Two decades later, QUALCOMM has about 8,000 employees and more than $8 billion in the bank. But that success was far from certain in the early days. While the company's technology now powers hundreds of millions of cell phones worldwide, QUALCOMM initially put the cell-phone business on hold to concentrate on a satellite truck-tracking idea that promised to get to market more quickly.

Mr. JACOBS: When you start a company with a few people, you have a major cash flow problem, so you're always worried about the money side of things. You have no choice but work really hard, try to come up with ideas, and then really work at it.

HORSLEY: By the time QUALCOMM had the money to invest in cell phones, rival technologies had a big head start. Jacobs fought hard to convince skeptical customers that his company's technology, known as CDMA, was superior and would allow companies to squeeze more calls into the same radio bandwidth. A front-page profile in The Wall Street Journal in 1996 called Jacobs a rare corporate hybrid of path-breaking engineer and aggressive marketer. The article raised doubts about the viability of QUALCOMM's system and quoted Jacobs himself as wondering at times, does it work? Will it get to market? Forrester analyst Charles Golvin says within a few years, those doubts were put to rest.

Mr. CHARLES GOLVIN (Forrester Research): The technology has absolutely proven itself. You know, its performance has been excellent. You know, they're very technologically smart, but they're also quite business savvy when it comes to seizing new opportunities.

HORSLEY: By 1999, QUALCOMM was a Wall Street darling, its stock soaring more than 2,500 percent that year. Although it lost some of that ground when the tech bubble collapsed, its cell-phone technology continues to spread. Jacobs says with that popularity comes a new set of challenges.

Mr. JACOBS: When we started and we started talking about CDMA, yes, there was a problem that nobody believed we could make it work, but that was useful because nobody was, in fact, trying to compete with us at the time. Now everybody wants to compete. And so Paul is going to have to run that much harder to stay ahead.

HORSLEY: Paul is Paul Jacobs, Irwin's son, who was tapped by QUALCOMM's board of directors to succeed his father at CEO. That sort of family succession is rare in publicly owned companies. But Mark Stern, who heads the board's governance committee, says this was not a case of nepotism.

Mr. MARK STERN (QUALCOMM Board's Governance Committee): We know that Paul is Irwin's son, and that familial leadership is a sensitive matter. But the board unanimously believes that Paul is the right person to lead that team into the future.

HORSLEY: Like his father, Paul Jacobs has a PhD in engineering and a solid grounding in the QUALCOMM culture. But Steve Altman, the company's new president, says there is one way in which Paul, who grew up in California, differs from his Massachusetts-born father.

Mr. STEVE ALTMAN (President, QUALCOMM): If you hear Irwin speak and you hear Paul speak, Paul says career (pronounced carEEA) and data (pronounced DAYta). Irwin says career (pronounced carEER) and data (pronounced dayTER).

(Soundbite of laughter)

Mr. ALTMAN: That's the big difference.

HORSLEY: The elder Jacobs plans to keep speaking out, traveling for QUALCOMM and evangelizing for CDMA. He retains his title as the company's chairman, but says he'll leave day-to-day operations to his successors.

Mr. JACOBS: I'm sure they have some of their own ideas, some things they want to make happen. And I will not be in the way of allowing them to make that happen. In fact, I'm going to be rather excited standing back and watching it all happen. So it should be kind of an interesting experience.

HORSLEY: As the last 20 years have shown, Irwin Jacobs is not someone who takes it easy in retirement. Scott Horsley, NPR News, San Diego.

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