♪ emily: qualcomm's products touch the lives of aliens around the world. it is the biggest maker of chips and smart phones, expanding to cars and at the forefront of five g network. ask in everyday person what qualcomm does and you will likely get a blank look and yet, qualcomm has been in business headlines on was constantly over the last couple of years because of a dispute with apple, qualcomm's biggest customer. then, the white house killed a takeover of qualcomm. in the midst of a trade war, china effectively killed the

,akeover of another chipmaker all setting up challenges or perhaps new opportunities for qualcomm readership. joining me today is steve mollenkopf. thanks for being here. steve: happy to be here. emily: you have a few things going on. you are in lawsuits with apple. you had a failed deal this past year. what did i miss? steve: you have not miss anything. are at the we epicenter of a lot of key technology which tends to make us interesting from a partner point of view. we don't tend to do anything small. when i look at it, if anything improves under the technology -- emily: would you have taken the

job if you had known of all the complex situations you would be giving with? knew: yes, it was clear we what we wanted to do next and so a lot of these things were issues that we know about and we are knocking them off the list. athink anytime you are technology company, you have to be prepared for ups and downs and what you tend to do, i think live your life further out from where you are living. you are betting on technology moves. you are always an optimist. you have to work through near-term issues to get to the long-term changes. emily: how have you evolved as a feeder the last two years -- a leader the last two years? tolerant.m very i think it has been interesting

to have the ability to leave the company through these -- lead the company through these times. is majority of the company focused on driving 5g and that tends to be the job of the senior group, to remove the other things so that the others can work on things that really drive the long-term values. emily: you certainly know what that is like. you have been working at qualcomm for 22 week -- 24 years. different was it been? -- then? started, this was before cellular. that not onlylief would you eventually call people , the concept of having your own number. we said you will have a computer in your pocket and that will

have tremendous ramifications. we have been there in every step getting people to transition, getting the technologies small enough and low enough power so that you can put a computer in your pocket and on top of it, abilityt thing is the for these same technologies, the low-power processing, the ai at the edge of the internet, that is now going to disrupt almost every other industry, so for us it is probably the widest funnel in the history of the company. emily: you think people don't appreciate the technology that goes into their phone? steve: i think the average consumer does not understand the requirement. that we areake sure creating the technologies for

business, let's say eight years from now. we are trying to create the technology for a company that has not been born yet. get,ig investments that we really putting our foot on the pedal to were three years ago because we said this is going to be significant. emily: when will i be able to make a 5g phone call? steve: you will get that next year. the first half of next year you will see that rollout. the second half, it will be very prevalent in going into 2020. emily: how big of qualcomm's business will that the? steve: i think it is tremendous. how do we take the roadmap of seller -- cellular and

distribut it to a global basis? it is a big change in how logistics work and how cities work. same thing with health care. emily: how will my life and the worldly different? steve: near-term, much more access to more bandwidth at a cheaper cost in the number of companies that can provide you rate,e at a very high meaning equivalent to what you get on your internet at home will be available in your home and outside of your home. you will see some competition between the cable companies who provide you internet service and the wireless companies and they will really change the landscape. emily: we have reported that china is considering merging the

second and third largest telecom companies. there is a great concern this will give china and advantage with 5g. are you concerned? steve: not much. i don't think there will be a lot of winners. emily: what if it is south korea or japan? don't see a risk? steve: we are partners by choice of those. don't forget europe as well. if you are the technology leader, your problem is not are my markets big enough? this how do i scale because there is so much demand for it. that is the issue now. ♪ steve: there is probably no better opportunity and partner for qualcomm then apple. ♪

emily: qualcomm is a company

that touches the lives of billions of people. you have been in most iphones of the this point in a lot of people don't know what qualcomm is. does that bother you? steve: no. i think it is part of our success. our job is to make the technology available to people. who purposely stay behind their brand. we don't pick favorites. emily: let's talk about apple. for long time, this is your biggest customer and now they are your biggest nemesis. how would you describe your relationship with apple today? steve: we have a disputesteve: over the price of ip. we think that is moving to a time where our strategy is unfolding in the environment is such i think you are in a position where it will get done. at the same time, i think there is probably no better opportunity and partner for qualcomm into work with apple. it makes sense that the

technology leader in mobile would be partnered with the technology leader. the way we think about the business is eventually you get the disputes figured out. apple is -- lieve steve: i think so. if you have leadership technology in your roadmap will eventually dominate. i think there is no reason why that should not be the case. taking on the world's most valuable company. they have stopped putting your chips in their phone and they say the patents they are paying you for are invalid. how does something so bitter get resolved favorably for qualcomm?i think steve: -- the wrongvorably is term. we have had disputes and as fast -- in the past.

we are not a small company in terms of being able to execute strategy. those things will get resolved. i think they get resolved on the courtroom steps, sometimes they don't. the strategy is playing the way we thought. emily: critics say will come is not articulating it side of the it could beugh and dead in the water. what is your response? we have hundreds of agreements, many of them signed in the last three or four years when we've had a number of new agreements signed in china. areoutlier for people who paying as opposed to not paying. that and ito prove think we are pretty confident. emily: have there been any talks? steve: nothing to report on. emily: when could we expect

progress? steve: we have always laid out the schedule that the second half of this year a number of milestones hit. for partiesones hit to change their perspective. we don't know that will be the case here. if it is come i'm sure there will be lots of news for you. emily: what is it like? steve: you kind of result the ip side and then go back to working on the technology side. don't know if that will be the case here, but that is sort of a typical resolution. we have planned our business assuming that is not the case and for us, it looks like upside and i think we are confident in our ability to execute. emily: you have shied away from letting this get to ugly in public. is that part of who you are or strategy? steve: first of all, it is very

much what is going on. big companies have disputes all the time. they don't make it personal. we are in that category with a number of companies. what you see is what you get in terms of how we think about it. emily: you were recently involved in a very public situation with the ceo who does not enjoy being in the spotlight and that is the ceo of broadcom. the white house blocked it. how did you navigat it? steve: we spent a lot of time with shareholders and working with how we could resolve what they wanted us to resolve. one of the big issues is deal certainty. i think in this case, it was proven that our board were pretty smart and circumspect to take a cautious view in

preparation for 5g. i think today it would be and any type of big merger that requires approval in the united states, just the political environment is quite difficult. one of the things we were able to do is navigate that as a company and remove that uncertainty away from our shareholder base and we are pleased with how the stock has been performing. we are going to continue to do those things. for you as ceo, what was the range of emotions when you found out that would not happen? steve: there is no playbook when something like that happens, but luckily the law tells you what you need to do, so we did that and move forward. i think that mentality is behind

us. the real focus is the 5g and how we resolve that. the president saw a national security threat. you look worldwide, qualcomm is a leader in 5g and i think they wanted to make sure that maintains. i'm not sure anyone understands what happens there. qualcomm tried to buy in you waited two years. the chinese government never said no or if they just let the deadline last in the deal was effectively dead. how big of a blow was that? steve: we were very clear in terms of what we were to do and it played out not the way we wanted to. there's really no dramatic

ability inhe action and probably now the end of the midterm elections. what we decided to do was remove the uncertainty for shareholders and it has proven to be the right decision for us. --do you think it still could happen? steve: the merger agreement has been terminated by both sides and so it is not happening. i think it was handled pretty skillfully. we feel like our relationship is as strong as it ever was. it never became qualcomm versus china. we had bad timing in terms of showing up. sometimes you have to decide to

move on. the business that qualcomm does, do you think at trade war is good or bad and is a good or bad for qualcomm? steve: i think any industry would tell you they prefer to have it resolved. we are somewhat insulated or don't have as much impact. with that being said, we like to have a stable environment and we think we will get to that point. emily: could the move the president is making lead to manufacturers make their own chips? steve: that is not what we are seeing. the big trend in china is that the chinese manufacturers want to be global players. emily: there has been some turnover since broadcom.

what is the mandate? thee: drive 5g and resolve remaining license disputes. turnover andot of i think moving in a direction that is quite healthy and looking forward to driving that mandate. ♪ steve: you will see a tremendous amount of excitement in the mobile space just from the launch of five g. 5g.

emily: the takeover drama is still not over. some of the founders trying to take the company private. what is the status of that? this is someone you know very well. quiet.it has been pretty if anyone came up with an offer, we would listen to it, but we

have not heard anything. emily: do you talk with him on a regular basis or are you still engaged? left the, he has company so we really don't have those types of conversations. emily: part of the argument behind going private is the licensing is complex. you are making these long-term investments that will take time to pay off and investors need to be patient. what you think about that? large --am large -- by me there isear to an advantage one way or another. say. hard for me to emily: do you think it could be advantageous to be private? steve: we are a pretty large

company. in order to do that type of deal, you would take on a lot of leverage. emily: when will we see qualcomm returning to the double-digit quarterly growth that made this company so popular with investors? steve: i think near-term we are focused on the stabilization of the apple relationship and the growth of 5g. both of them we think provide great output. emily: what if apple doesn't go your way? steve: it is something we think about. worldwide, we have hundreds of agreements. we feel once we have an opportunity, we will be able to prevail. emily: let's talk about new markets and where you see all calm progressing.

-- qualcomm progressing. qualcomm already gave up on servers. what about your efforts in pcs, cars? steve: i think of two things. are we developing technology that has international demand and can we scale them into the markets? today, are real slow -- our focus is on scale. the demand is there. new customers make a new products. i think we have 9000 new customers today that we did not have before and i think that is years.in the last four emily: what will it look like in 2020? of focus on 5g and

areas outside of mobile. i think you will see a lot of excitement in the mobile space in the launch of 5g. it is very disruptive. it is going to be an exciting time. emily: will qualcomm still be independent? steve: i think it is too far in the future. what is clear is that anyway way we can drive value, we will look at it, but we have a great position to be in. emily: when do you think business will return to normal? steve: i don't think it ever returns to normal. i look back at the last 24 years and we've never had a really spot. i had the fortunate opportunity to work on a lot of projects. we are ever if going to be in a super stable

position, but we will be in a more stable position from the last several years. emily: what is one thing you know now that you do not know when he took the job or years ago -- four years ago? steve: you have to figure out what you want to do. make sure you spend the time on it because if you don't, it is not going to get done. emily: don't you have your people to do those things? easy to dos very things. the organization will let you do whatever you want to work on. you have to make sure you are working on those things you want to work on. it is certainly true when you go through tremendous scrutiny. there are things just by the where the ceo has to make that call.

you have to set time aside and make sure you know where you are. emily: what is your game plan as a ceo and manager knowing you have to watch more uncertainty coming your way? steve: i think the first thing we just acknowledge there's always going to be uncertainty. for us, the way we mitigate that is to have technology that people want and if you have that, you consult everything else -- you can solve everything else. madeig calls for 5g, we years ago in the middle of all this uncertainty. this will not be the last call we have to make. the technology roadmap will continue. that is the fun part of the business and we are looking forward to it. steve: thank you for joining us.

it has been great to have you here in the middle of all you have going on. thank you.

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