Thursday, June 6, 2013

Irwin's latest medal

On Thursday, Irwin Jacobs was presented with the IEEE Medal of Honor. This goes with his National Medal of Technology in 1996 and his Marconi Prize in 2011 (the latter ceremony was marred by San Diego’s record power failure, but no such problems were witnessed today)

Not surprisingly, the 75 minute ceremony focused on his role in leading Qualcomm (and to a lesser degree Linkabit and his MIT days) to help lead the adoption of digital communications.
I wasn’t invited to the in-person event, but watched the webcast. Here are my impressions.

First, Jacobs seemed very spry and intellectually alert for a man of 79. I’d love to be that alert when I’m that age.

Secondly, his son Paul seemed much more at ease standing in his father’s shadow than he did at the 2007 shareholder meeting (the first time I saw him preside since taking his dad’s job in 2005) or at the October 2009 joint interview with his father at CTIA in San Diego. Maybe Paul knows that everyone knows that dad’s not coming back. Or maybe he has some victories that gives him confidence. Or maybe he just got the CEO job too young, but has since grown into it.

In any event, his praise of the founding CEO was sincere, heartfelt and convincing — the most moving of all the testimonials of the afternoon.
Third, it appears that the video clips quoted most of the Qualcomm founders: Dee Coffman, Harvey White, Franklin Antonio, Chuck Wheatley. Klein Gilhousen was mentioned (in the context of the original CDMA prototype) but didn’t seem to have a speaking role.

However, conspicuous by his absence was Andrew J. Viterbi — the only other Linkabit founder who was a Qualcomm founder. That would be the same Andy Viterbi who won the same medal three years ago. He showed up in a lot of pictures, but did not have a speaking or live role in the ceremony. (He did show up at the 2011 Marconi ceremony honoring Jacobs and the late Jack Keil Wolf).

Instead of Viterbi, in the front row of the auditorium was the 2011 winner of the IEEE Medal of Honor, Morris Chang, founder and CEO of TSMC — who remains Qualcomm’s major manufacturing partner. From his public acknowledgement of Chang and their role in Qualcomm’s ongoing success, I got the sense that Paul feels he badly needs Chang and vice versa.

I have heard that there has been an estrangement between Viterbi and Jacobs, although I’ve not asked either man about it directly. In some ways it reminds me of some of the superstar rock bands that broke up. As with the rock bands, I hope there will be one last smiling reunion for induction of the Qualcomm (or Linkabit) founders into the Hall of Fame.

Wednesday, October 3, 2012

Leap back in play

The announcement this morning that T-Mobile is buying MetroPCS directly impacts both Sprint and San Diego’s Leap Wireless, which may either end up in each other’s arms or left standing alone.

The good news for Leap is that they no longer have to deal with MetroPCS’s repeated acquisition attempts, because it’s disappearing as a corporate entity.

The bad news is that its exit opportunities are reduced. After the FCC blocked AT&T’s efforts to buy T-Mobile, it seems unlikely that Verizon or AT&T would be allowed to buy a large firm (such as #6 Leap). So the possible options are either to be bought by #3 Sprint, or for the #4 T-Mobile to add Leap with MetroPCS to its spectrum and customer base.

Leap’s stock today was up (briefly) up on speculation that it is now in play. The WSJ reported:
As Bernstein analysts put it today: “Leap Wireless is now the belle of the ball.”

But maybe Bernstein should have added: “Depending on the ball.”

Leap still has some ugly spots, or as Bernstein diplomatically put it: “consolidating Leap may be a bit more complicated than it first appears.”
However, unlike MetroPCS, Leap has rural markets, limited spectrum and is late in LTE deployment, causing Bernstein to conclude that the company would not necessarily be a good fit for Sprint. Perhaps that’s why the stock now is trading below today’s opening price — or even its price Monday, before shares were bid up on reports of the possible MetroPCS sale.

With Leap’s market cap at $0.5b, it’s possible that T-Mobile could also make a bid. Leap’s stock has been trading in a $6-10 range this year, far below its 2009 (post-financial crash) high of $39, let alone its all-time high of $95.90 in July 2007. With either acquirer, it would end San Diego’s third largest public telecom company, after Qualcomm ($106b) and ViaSat ($1.6b) and ahead of Maxwell ($237m).

Meanwhile, the impact of the MetroPCS (or Leap) CDMA defection will be much less on Qualcomm than if it had happened five years ago. Qualcomm is now getting processor design wins (particularly for smartphones) on GSM network LTE phones, including T-Mobile phones from Samsung and HTC.

Friday, March 30, 2012

Local public telecom companies

As part of a conference on UC spinoffs, I presented a paper on the growth of the industry and its tie to UCSD. As part of that, I updated my January 2008 data on the small number of public companies in San Diego's telecom industry

Market Cap†
Change in 50 months
QualcommQCOM $114,900m
Leap WirelessLEAP
Maxwell TechnologiesMXWL
Novatel WirelessNVTL
Dot Hill SystemsHILL
† Market cap at 4pm EST Friday, according to

I knew that selling Qualcomm had been financially a bad decision. I had not realized that ViaSat and Entropic had done so well. In particular, Entropic has done tremendously well after a precarious start since its IPO. Meanwhile, Leap’s stock has fallen even more than Metro PCS since it rejected its repeated acquisition offers.

As an aside, Qualcomm has the 7th highest market cap on the NASDAQ: after Apple, Microsoft, Google, Oracle, Vodafone and Intel, but ahead of Cisco, Amazon, Amgen, eBay and Starbucks. There are only about 14 or 15 stocks on the NYSE with higher market cap (including IBM, AT&T, Coke and several banks and oil companies).