Qualcomm CEO Mollenkopf to retire

[SAN DIEGO] Qualcomm said company President Cristiano Amon will succeed chief executive officer Steve Mollenkopf, who will retire in June after 26 years at the world's biggest maker of chips that power smartphones.

After beginning his career as an engineer, Mollenkopf, 52, became CEO in 2014. He has led Qualcomm through several generations of smartphone technology and multiple crises, including a hostile takeover attempt and legal and regulatory challenges around the world that have threatened to take away the company's main source of profit.

Mr Mollenkopf took over the top position from Paul Jacobs, son of founder Irwin Jacobs. He will continue to serve as a strategic adviser to Qualcomm for some time, the company said in a statement Tuesday. His retirement is effective June 30.

Mr Amon, a 50-year-old Brazilian, will become the fourth CEO of the San Diego-based company. An electrical engineer by training, Mr Amon worked his way up through the ranks at Qualcomm, where he started in 1995, and has served as president since 2018.

He will be tasked with delivering on the transition to the new 5G wireless standard, one which Mr Amon has said will take Qualcomm's products into a new range of markets outside of smartphones. Investors are looking for a return to previous revenue highs delivered during the transition to 4G and meaningful progress in areas such as automotive, personal computer, and networking equipment silicon.

Under Mr Mollenkopf, Qualcomm was attacked by regulators and customers for its unique business model, in which it charges licensing fees for smartphone technology regardless of whether phonemakers buy chips or not.

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Through a legal battle with Apple and a US antitrust case, Qualcomm's opponents have tried to break its lock on the fundamentals of technology that underpin modern phone systems with little success.

The taciturn Mr Mollenkopf saw the challenges as a negotiating tactic by customers that would fade when they realised they needed Qualcomm for the next new technology standard transition. Indeed, Apple joined the ranks of licensees and continues to use Qualcomm modems in the iPhone.

Other major customers such as Samsung Electronics have signed long-term licensing agreements. Qualcomm has won all of its court battles, including the right to charge licence fees in China, a crucial win.

Under Mr Mollenkopf's leadership, Qualcomm's stock first slumped as the legal battles mounted, but later rebounded to end 2020 at US$152.34, more than double the price when he took office.

The company is on course to record sales of US$30 billion this year, according to the average of analysts' estimates compiled by Bloomberg. That 41 per cent growth spurt will then subside to gains in single digits in 2022 and 2023, according to those projections.

Mr Amon has been the face of Qualcomm's promise of leadership in 5G. He has argued that the new standard is happening faster than its predecessor and will give Qualcomm's technology a role in new areas such self-driving cars. Mr Amon has led the company back into the market for personal computer processors through a partnership with Microsoft to challenge Intel's dominance there and has launched new initiatives such as chips for cellphone base stations.

Mr Amon will also have to steer Qualcomm through a world where its customers are more capable of supplying themselves than they've ever been, pushing his company's products forward faster to continue to make them essential.

Apple now makes its own processors and has embarked on an effort to supply itself with modems. Samsung already makes both of those products and China's Huawei Technologies is already largely self-sufficient. Qualcomm's modems are at the heart of almost all of the first 5G devices that went mainstream last year.

BLOOMBERG