(Image courtesy of Kārlis Dambrāns, Creative Commons).
(Image courtesy of Kārlis Dambrāns, Creative Commons).
(Image courtesy of Kārlis Dambrāns, Creative Commons).
(Image courtesy of Kārlis Dambrāns, Creative Commons).
(Image courtesy of Kārlis Dambrāns, Creative Commons).

Qualcomm's Second-in-Command to Leave at End of the Year

Aug. 29, 2017
The announcement comes amid simultaneous revolts from regulators and customers unhappy with Qualcomm's patent licensing bu

Derek Aberle, Qualcomm’s president and second-in-command, will leave the beleaguered chipmaker as it tries to repel revolts from regulators and customers unhappy with its patent licensing business.

Aberle, who will leave Qualcomm at the end of the year, has been president since 2014. For six years before that, he led the company’s patent licensing unit, which has been rocked in recent years by regulatory battles and a major patent lawsuit from Apple.

Aberle’s exit comes as customers and regulators air grievances with how Qualcomm calculates fees on devices sold using its wireless patents. Apple and other smartphone makers pay a percentage of their sales to use these patents, which contain standard technology for tapping into 3G and 4G wireless networks.

A statement from Qualcomm did not say why Aberle decided to leave. It also did not say whether the recent legal scuffles had anything to do with the decision or not. Qualcomm has cut revenue forecasts in recent months amid battles over patent royalties it charges customers.

After paying a $975 million fine over its licensing practices in China, Qualcomm has faced scrutiny in South Korea for allegedly holding its chip supply hostage to sign better licensing deals and giving rebates to companies that agreed to buy its chips exclusively. It is also under antitrust investigation in the United States, Europe, and Taiwan for withholding patents from competitors and other alleged sneakiness.

Donald Rosenberg, Qualcomm’s general counsel, has taken pains to publicly deflect regulatory concerns. He has said that Qualcomm's licensing tactics have been industry standard for decades. He has also argued that the attacks on its business would have a chilling effect on research and development, hurting consumers in the long run.

Qualcomm’s customers are also in revolt, and Apple has fired the sharpest barbs in recent months. After aiding regulators in South Korea, Apple filed a $1 billion lawsuit in January accusing Qualcomm of unfair licensing terms. Qualcomm followed with a countersuit that accused the smartphone firm of making false statements to regulators.

Apple later called Qualcomm’s business model illegal because it charges fees on every wireless device sold with its chips. Now, Qualcomm is seeking to ban iPhones using separate patents to extend battery life from being imported to the U.S. That request was condemned by major technology companies in a letter to the U.S. International Trade Commission last month.

During the legal storm, other executives with ties to Qualcomm’s licensing business have left. In May, Esin Terzioglu, a chip designer and vice president of engineering, defected. He was in charge of Qualcomm’s modems for the last eight years but now he leads Apple’s wireless SoC efforts.

After Aberle leaves, the president of Qualcomm’s licensing business, Alex Rogers, will start reporting directly to chief executive Steve Mollenkopf. Rogers has been head of patent licensing since March 2016. Last year, the unit represented a third of Qualcomm’s $23 billion in revenue.

“I want to thank Derek for the vision, creativity, dedication, and judgment he brought to the company and wish him all the best in the future,” Mollenkopf said in a statement. He added: “I believe the company is well positioned to build on Derek’s record of success.”


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