Since succeeding Julie Cunningham as vice president of IR at Qualcomm in 2003, Bill Davidson has gained a second title: vice president of global marketing. It’s unusual to see an Iro with such a high-profile sales role, but the positions are not so different – at least in Davidson’s eyes. ‘The shareholders and the sell-side analysts are my customers and the product we have is information,’ he says.
Sales makes him especially conscious of company image, which is a bit tarnished given the volume of litigation Qualcomm has ongoing with licensees and competitors.
‘We don’t have a massive sales force so our competition has defined us over the last year and a half, quite incorrectly,’ Davidson says. Fortunately, he ‘thrives on the challenge of turning people’, and is proactive in handling misleading reports and getting out accurate messages.
In any case, there is positive news for investors. Lately, Qualcomm has been making headlines less for its epic legal battles and more for raising its profit and revenue estimates as sales top expectations. The San Diego-based firm is in a good position. Part of the S&P 500, Qualcomm is a Fortune 500 company traded on the NaSdaQ.
It develops wireless technologies and is best known for pioneering – and owning the patents that cover – the code division multiple access (Cdma) wireless phone standard.
Legal troubles
As the originator of such key technology, Qualcomm can generate enormous licensing fees. But this comes at a price: the company has a variety of suits and countersuits pending over competition and patent issues. In the past year Texas Instruments, Nokia and Broadcom are just a few of the companies Qualcomm has sued for patent infringement.
Broadcom in turn has accused Qualcomm of having licensing practices that violate antitrust laws. Qualcomm prevailed in US federal district court, although Broadcom has appealed. Davidson disputes claims often leveled that Qualcomm acts as a monopoly. ‘There is no reason to make a royalty so high that it slows the growth of the market,’ he asserts.
Yet as a veteran of both sales and IR, Davidson is accustomed to dealing with conflict. During his 13 years in sales at Bell Atlantic, predominantly as vice president of wireless data sales and marketing, he underwent annual media training. Later, as vice president of sales at wireless tech company Aether Systems, he moved into IR terrain as an industry liaison, getting involved in investor conferences, traveling ‘with the Iro and [acting] as the spokesperson.’ In 2002 he returned to sales, joining Qualcomm as vice president of carrier relations.
However, Davidson’s time solely devoted to Qualcomm sales was short-lived. His IR-colored background impressed Qualcomm’s president Steve Altman, who had interviewed him for sales. In 2003 Davidson was tapped for IR. Given the breadth of Qualcomm’s businesses, his range of work is varied. ‘One day I’ll be talking about chipsets, the next I’ll be talking about downloading applications to handsets,’ he explains.
Davidson has made a few innovations. Moving to a new building, he physically united IR, PR and governmental affairs by putting the offices close together. He also brought in the technical marketing team for daily meetings.
The 13 IR team members’ diverse backgrounds inform their various roles. For example, senior director Nancy Patton’s internal audit history makes her an invaluable financial resource. ‘There isn’t a financial fact she can’t spit right out or get me within two minutes,’ Davidson says.
IR analyst Garrett Ponder doubles as surveillance expert, and senior manager Julie McClure handles the retail side and works in both PR and IR. Davidson moved the responsibility for producing the annual report to PR ‘because we don’t advertise, so the report is our one marketing piece a year.’
On the Street
Every month, Qualcomm surveys its shareholder base. ‘An outside firm does it for us,’ he says. ‘We’ll ask it about our level of disclosure, our earnings release and how effective our analyst days are.’ Since Davidson joined Qualcomm, communication has exploded. ‘There are 10-15 questions during the earnings call – and we don’t leave the building that night until we’ve answered every one,’ he says. Davidson talks to major shareholders at least 10 times annually, ‘sometimes two or three times a week.’ Qualcomm also holds about 42 conferences, 100 meetings and nine or 10 roadshows each year.
The website is integral to transparency efforts – all quarterly earnings and presentations to investors and analyst days are updated promptly. Communications efforts include the issuing of 380 press releases last year. In 2007 Davidson is replacing some analyst days with a cocktail event attended by the Ceo and chief technical officer to give ‘investors and sellside analysts the opportunity to speak for two and a half hours, and interact in a more informal environment.’ The annual meeting is still ‘extremely well attended,’ Davidson notes. And when he has proxy issues, he provides investors with information before they cast their votes.
The website also enables effective shareholder monitoring. ‘We can track how many people are using it every month,’ Davidson says, adding that new software will help them do more. ‘It’s like sales force automation where sales people track their calls. I want our team to track our interaction with our investors.’
Roadshows are another
opportunity to assess shareholder attitudes. ‘One of the requirements for us is that we get feedback,’ Davidson points out. ‘Someone from IR is always in the room when there’s any investor interaction.’ He is especially active after 13Fs are filed with the Sec so he can ask shareholders why they are buying or selling shares.
Getting better
Qualcomm’s shareholders are also changing. ‘We’re much more an institutionally held stock,’ says Davidson, noting that retail holding is now as low as 20 percent. Since instigating a dividend, Qualcomm has developed a reputation as a value stock, precipitating a shift to longer-term holders, some of which are hedge funds.
Overall, the famously volatile stock has risen respectably since Davidson joined. After doubling in 2004, the stock was split. ‘It’s definitely contracted now because of the legal issues, and the uncertainty that causes for investors,’ he concedes. After so many recent legal issues, he looks forward to an expanded role in marketing, and intends to integrate communications ‘so the press, financial industry, Washington and the industry analysts all get the story and understand it.’
As the legal issues resolve, Davidson sees more gains: ‘The boulder that was pushed down a hill on us with all the lawsuits, well I feel it is slowing down a bit.’
