Qualcomm today announced, without any sort of prior warnings, that they would be appointing Steve Mollenkopf as the CEO starting in March of 2014. He replaces the current CEO, Dr. Paul Jacobs, who has been in the position of CEO since his father and co-founder of Qualcomm, Irwin Jacobs, stepped down in 2005. This will mark the first time in the company’s history that the company has been run by someone without the last name Jacobs. And while some people may argue that Dr. Paul Jacobs was nepotistic appointment, however, he was probably one of the most qualified people for the position at the time and has proven that true.
Since Jacobs became CEO in 2005, the company has gone from a $60 billion market cap to over $120 million today. In the last 8 years, he has doubled the market cap of Qualcomm’s stock, even with the economic recession of 2008 and 2009. That was partly due to the fact that Qualcomm grew significantly over this period of time as a company and expanded greatly into new markets, especially with the creation and growth of the Android operating system. In that same year, 2005, Qualcomm was just under $6 billion in revenue to $25 billion in fiscal 2013. Not to mention, Qualcomm is now considered one of the leading semiconductor companies in the world and the foremost leaders in wireless and mobile processing technologies.
Steve is certainly a company man and has been with the company through thick and thin. He has served as President and COO of Qualcomm since Nov 2011. Prior to that, je served as EVP and Group President from September 2010 to November 2011, and before that, EVP and President of QCT from August 2008 to September 2010, and before that as Executive Vice President, QCT Product Management from May 2008 to July 2008, and before that as Senior Vice President, Engineering and Product Management from July 2006 to May 2008 and before that as Vice President, Engineering from April 2002 to July 2006. Mr. Mollenkopf originally joined Qualcomm in 1994 as an engineer and has since ascended over 20 years to the position of CEO. Since he will be replacing Paul Jacobs, Jacobs will abdicate his CEO position but keep his seat as Chairman of the Board of Directors and help steer the company’s new technologies and directions with Mollenkopf.
What bothers me about this announcement is the fact that it didn’t come with any sort of warning and it kind of seems a bit abrupt. The possible reason for this could be because of yesterday’s rumor that Steve Mollenkopf was being rumored as a potential replacement for Steve Ballmer. However, with today’s announcement that is clearly a bunk rumor without much foundation. But, I believe that Qualcomm has already started to think about replacing Paul Jacobs, but wasn’t planning on doing it so soon. I believe that Steve Mollenkopf was probably already being groomed to be the next CEO in his COO position, but I don’t think that they were ready to make the switch yet. Especially with Qualcomm being such a conservative company, they would have wanted to pick just the right time and place to announce such a major change. I believe that Steve Mollenkopf was actually being considered by Microsoft’s board and that Qualcomm simply didn’t want to let him go and gave him the CEO position earlier than they would’ve wanted to.
Obviously, all this talk about Mollenkopf speculation because there’s no mention of any reason for the change as there rarely ever is in any CEO change, especially from a company like Qualcomm. But, it does explain why Qualcomm would make such a major change so abruptly and without warning. Not that many people will argue with the board’s unanimous decision. Qualcomm’s stock dipped sharply after the announcement (likely to to it being a surprise to most of us) but is still in positive territory on the day.