"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ 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 5g network. ask an everyday person what qualcomm does and you will likely get a blank look and yet, qualcomm has been in business headlines almost 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 by broadcom

. in the midst of a trade war, china effectively killed the takeover 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 the dirt lawsuits with apple around the world. you fended off a hostile takeover of your company you had , a failed deal this past year. what did i miss? steve: you have not missed anything. i would say we are at the center 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 proved the importance of the technology that we work on. emily: would you have taken the job if you had known of all the complex situations you would be giving with? steve: yes, it was clear we knew

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. i think anytime you are a 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. otherwise you wouldn't remain in the industry. emily: our current. steve: correct. you have to work through near-term issues to get to the long-term changes. emily: how have you fault as a leader the last two years? steve: i am very tolerant. i think it has been interesting to have the ability to leave the company through these -- lead

the company through these times. if you look at the public, what goes on in the company, the majority of the company is 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 24 years. how different was it been? -- then? steve: when i started, this was before cellular. we had this belief that not only 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.

not only for cellular but also for industry. we have participated in every step whether it was getting digital cellular to come out coming getting people to transfer to lte, getting the technologies small enough and low enough power so that you can put a computer in your pocket and on top of it, the great thing is the ability 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. what qualcomm tends to do is we want to make sure that we are 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. i think people don't realize how early it you have to work on it. big investments were about two5g or 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 be? steve: i think it is tremendous. how do we take the roadmap of cellular and distribut it to a global basis?

then, how do we scale into new industries? things like self driving cars. the ability for a car to be connected and to be connected to every other car allows it to see around corners. 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 worldbeat different? steve: near-term, much more access to more bandwidth at a cheaper cost in the number of companies that can provide you service at a very high rate, meaning equivalent to what you get on your internet at home will be available in your home and outside of your home. they will go up by a lot. 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'm not sure i see an east west competition where 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. they are also quite aggressive. if you are the technology leader, your problem is not are my markets big enough? it is how do i scale this because there is so much demand for it. that is the issue now. that the good problem to have with your company. steve: there is probably no better opportunity and partner for qualcomm then apple. -- van to work with 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. what we want to do is be a great partner to enable them to be successful and 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 dispute over the price of ip. we think that is moving to a period of 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 band to 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. emily: you believe apple will remain a customer. 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. emily: you are 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? bitter may, i think be the wrong term. we have had disputes with licensees in the past as well over the price of ip. it is no different here. it's just bigger companies.

they're obviously a very large company, but 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. we don't know which way it's going to go here, but the strategy is playing the way we thought. emily: critics say will come is not articulating it side of the ip story enough and it could be dead in the water. what is your response? steve: the data is pretty different. 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. the outlier for people who are not paying as opposed to those who are. we think the licensing is moving of stability.d our job is to prove that and i think we are confident in our ability to do that. emily: have there been any talks? steve: there are always talks between the companies but really 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 legal milestones hit. legal milestones hit for parties to change their perspective. we don't know that will be the case here. if it is, i'm sure there will be lots of news for you. emily: what does a win look like for qualcomm? steve: the normal scenario is that you resolve 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. as you know 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 either way. emily: you have shied away from letting this get to ugly in public. is that part of who you are or strategy? not wanting this to be in the spotlight. 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. they have very complicated relationships. 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 enjoy being in the spotlight and that is the ceo of broadcom. the white house blocked it. how did you navigate that? 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.

the u.s. government did what it did. i think today it would be difficult 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've done all the things we have said we are going to do and we are going to continue to do those things. emily: for you as ceo, what was the range of emotions when you found out that would not happen? steve: i don't you know how to react. it is unprecedented. 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.

emily: part of the reason it was blocked was because the administration and the president saw a national security threat. ? steve: if 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. emily: 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 moved beyond it. 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 change of the action ability in china between now and probably the end of the midterm elections.

what we decided to do was remove the uncertainty for shareholders remove the uncertainty for both companies and move on and it has proven to be the right decision for us. emily: the chinese government has left the door open and doesn't seem to want to take responsibility for ending the possibility of this happening. 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.

emily: given 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. our business will be strong either way. emily: could the move the president is making lead to manufacturers make their own chips? steve: that is not what we are seeing. what we are seeing is that the big trend in china is that the chinese manufacturers want to be global players. anytime there is a technology transition, people try to exploit that tangoe internationally. that brings them closer to qualcomm versus farther away. emily: there has been some turnover since broadcom.

what is the mandate? steve: drive 5g and resolve the few remaining license disputes. really take advantage of this opportunity that is coming along with everything being connected. we've had a lot of turnover and 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 5g. ♪

emily: the takeover drama is still not over. you have paul jacobs, former ceo and some of the founders trying to take the company private. what is the status of that? this summit is that you worked with for years and that you know very well. steve: we haven't heard anything actually. it's been a quiet. if anyone came up with an offer, paul or someone else, 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? steve: no, he has left the company so we really don't have those types of conversations. but if there were in need for one, of course we would we know each other well. emily: part of the argument behind going private is the licensing is complex. perhaps it would be better outside of public scrutiny. 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? steve: i think it is an interesting argument. by and large, in practice, how have we run the company? even with a lot of screwed into the we have done a lot of those things. it is not clear to me there is an advantage one way or another. you are comparing against something we haven't seen, so it is hard for me to say. emily: do you think it could be advantageous to be private? steve: it always depends on what the details are. if you look we are a pretty , large company.

in order to do that type of deal, you would take on a lot of leverage. that doesn't open up strategic flexibility. 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 that establish the value. 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 -- where you see qualcomm progressing.

you can work for a long time on some of the's technologies and then realize it's not going to be something that you dominated. qualcomm already gave up on servers. what about your efforts in pcs, cars? steve: i look at all of them and think they are pretty interesting. and i think of the business, i think of two things. i think are we developing technology that has international demand and can we scale them into the markets? today, our real focus is on the scaling. the demand is there. we are seeing early examples of new customers taking new products. i think we have 9000 new customers today that we did not have before and i think that is up 20x in the last four years. emily: what will it look like in 2020? steve: a lot of focus on 5g and areas outside of mobile. i'll be honest with you, i think

you will see a lot of excitement in the mobile space in the launch of 5g. it is very disruptive. in terms of the business models of carriers, how much bandwidth they get, and the ability to move forward. 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 stable spot. there were always at times when people said qualcomm was going to disappear tomorrow and you will never be good at this technology or that technology. i had the fortunate opportunity to work on a lot of projects. we were able to do the things people said. so i don't know if we are ever , 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 something you know now today as a ceo in 2018 that you didn't know when you took the job 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. that's a very basic thing, but hard to do in practice. emily: don't you have your people to do those things? steve: what happens is, if you grew up in the organization, it is very easy to do 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. i have learned that over the last four years. it is certainly true when you go of tremendousod scrutiny or big changes. there are things just by the nature where the ceo has to make that call. or have conviction on this

particular topic. i have learned that you've got to set time aside to make sure you know where you are on it. 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. first and foremost, that's what we do. the big calls for 5g, we made 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. we've got to make sure that were the leaders moving forward and we will continue to do that. that is the fun part of the business and we are looking forward to it. emily: steve, thank you so much for joining us.

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

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