Former Qualcomm CEO Paul Jacobs drops bid to take chip maker private

Reports suggest Jacobs has ditched his plans in favor of wireless tech pursuits.
Written by Charlie Osborne, Contributing Writer

The former chief executive officer of Qualcomm Paul Jacobs has given up the battle to take Qualcomm private, reports suggest.

Paul Jacobs, a long-standing member of Qualcomm who began working at the company in 1990 and served as CEO between 2005 and 2014, as well as board chairman from 2009 to 2018, will instead focus on his wireless technology startup Xcom Labs.

The Wall Street Journal reports that Jacobs, who was replaced with Steve Mollenkopf as CEO, reconsidered his plans in light of changes to Qualcomm's financial position.

Jacobs said in March he wished to take the chip private after leaving his position as executive chairman during Broadcom's hostile takeover bid, a mission which failed after US President Trump waded in and prevented the takeover, citing "national security concerns " related to Broadcom's presence in Singapore.

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The former chairman was not reelected to the board, with key members saying that "following his notification to the board that he decided to explore the possibility of making a proposal to acquire Qualcomm," conflict of interest would exist.

Any successful venture to acquire Qualcomm was always going to be an uphill battle which would require very deep pockets from backers. Qualcomm rejected a deal worth $146 billion from Broadcom at a time when the firm's market value was pegged at $90 billion, and Jacobs only owns one percent of the company.

The WSJ suggests that Qualcomm's current market value, estimated to now be $67 billion, is no longer as tempting a lure to Jacobs, who began reconsidering his plans last year.

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"As Qualcomm's position changed, the conditions weren't right to take it private," Jacobs said, according to the publication. "However, industry dynamics have created an opportunity for our new company Xcom to drive the development of advanced wireless technologies and we have exciting new ideas to bring to market."

With Qualcomm no longer the focus, Jacobs is now going to focus on Xcom Labs.

Launched in June 2018, San Diego-based Xcom Labs describes itself as an organization which is "inventing wireless technologies to propel the next mobile revolution."

The company recently acquired M87, a startup which develops device-to-device mesh networks with the aim of extending the cellular connectivity of existing hardware. M87 has previously secured $11 million through five funding rounds.

Qualcomm, meanwhile, is in the midst of an ongoing battle with tech giant Apple which has spanned across the past two years. Apple said in 2017 that Qualcomm was allegedly withholding refund payments and was operating an "illegal business model" with double-dipped royalty fees for its chips.

Qualcomm said in response that Apple was infringing upon patents outside of their licensing deals, and the fight has resulted in iPhone sales bans across both China and Germany.

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ZDNet has reached out to Qualcomm and will update if we hear back. 

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