UNIDENTIFIED COMPANY REPRESENTATIVE: Ladies and gentlemen, please welcome Chairman of the Board, Dr. Irwin Jacobs.
IRWIN JACOBS, CHAIRMAN OF THE BOARD, QUALCOMM INC.: Good morning, everyone, and welcome. I'm Irwin Jacobs, as was said, Chairman of the Board of Qualcomm. I'm happy to welcome all of you to our Annual Shareholders Meeting. And as you will, I'm sure, have noticed, it's the first time that we're holding this meeting here in our new auditorium. So it's kind of a special event and I'm glad to see everybody's fitting in well and it's working well.
Before starting, I'd like to introduce you to the other members of our Board of Directors who are with us this morning -- Barbara Alexander; Steve Bennett, one of our new Directors; Sir Donald Cruickshank; Ray Dittamore; Tom Horton, our newest Director; Dr. Paul Jacobs; Dr. Robert Kahn; Sherry Lansing; Duane Nelles and General Brent Scowcroft. And we also have here with us Director Emeritus and co-founder, Dee Coffman. One Director was unable to be here today, Marc Stern had some business elsewhere, but he's been with us here for the last two days.
I'd also like to introduce executives, Division Presidents that are present with us today -- Steve Altman, President; Len Lauer, Executive Vice President and Chief Operating Officer; Bill Keitel, Vice President, Chief Financial Officer; Derek Aberle, Executive Vice President and President of Qualcomm Technology Licensing; Andrew Gilbert, Executive Vice President and President of Qualcomm Internet Services and MediaFLO Technologies and Europe, here from London; Peggy Johnson, Executive Vice President of the Americas and of India; Steve Mollenkopf, Executive Vice President and President of Qualcomm CDMA Technologies; Don Rosenberg, Executive Vice President, General Counsel and Corporate Secretary; Bill Stone, Senior Vice President and President of FLO TV; Dr. Dan Sullivan, Executive Vice President, Human Resources; Jing Wang, Executive Vice President, Qualcomm Asia Pacific & Middle East and Africa, that keeps him a bit busy.
Also present, Jay Rains of the law firm DLA Piper, the Company's outside corporate legal counsel, and Mr. Kevin Bradshaw of the accounting firm of PriceWaterhouseCoopers, LLP, the Company's independent accountants. Mr. Bradshaw will be available to answer any questions concerning PriceWaterhouseCoopers and its service to the Company. The Annual Meeting of stockholders of Qualcomm will come to order. I will act as Chairman of this meeting. Don Rosenberg will act as the Secretary. Will the Secretary please report at this time with respect to the mailing of the notice of the meeting and the stockholders' list.
DON ROSENBERG, EVP, GENERAL COUNSEL, CORPORATE SECRETARY, QUALCOMM INC.: (inaudible - microphone inaccessible) affidavit certifying that on January 14, 2009 the Notice of Annual Meeting of Stockholders of the Company was deposited in the United States mail, addressed to each stockholder of record at the close of business on January 2, 2009. The affidavit of mailing will be attached to the minutes of this meeting.
IRWIN JACOBS: Thank you. Stockholders who are voted by mail or by proxy need not cast ballots today, unless they wish to change their vote. Prior to opening the polls for voting, we'd like to begin distributing ballots to anyone who would like a ballot. Please note that any shares held with your stock broker cannot be voted directly at this meeting without a legal proxy. A legal proxy is an authorization issued in your name from your broker. Please raise your hand if you would like a ballot. All covered?
At this point I shall appoint [Peter Deskovitch] to act as Inspector of Election at this meeting. Mr. Deskovitch has taken and subscribed to the customary oath of office to execute his duties with strict impartiality. This oath will be attached to the minutes of this meeting. Mr. Deskovitch's function is to decide qualifications of voters, accept their votes and, when balloting is completed, to tally the final votes. Will the Secretary please report at this time with respect to the existence of a quorum?
DON ROSENBERG: Yes, I have been informed by the Inspector of Election that proxies have been received for 1,461,933,736 shares of the 1,648,945,537 shares of common stock outstanding on the record date, which represents approximately 88.65% of the total number of outstanding shares of common stock. This constitutes a quorum for the transaction of business.
IRWIN JACOBS: Since the requirements for calling this meeting have been duly observed and there are represented here more than the necessary number of shares of the outstanding stock of the Company to constitute a quorum, I hereby declare this meeting to be duly constituted for the transaction of business. The formal business of the meeting is listed in the Notice of Annual Meeting and Proxy Statement that was mailed to all stockholders. There are two proposals to be considered by stockholders at this meeting. We'll now place each of the proposals set forth in the notice before the meeting.
Following the formal business of the meeting, we will make a few remarks on the developments of the company over the past year and, at that time, accept questions. The time is now 9.42 and the polls are now open for voting on all matters to be presented. The polls will be closed to voting after we go through the matters to be voted on.
The meeting will now proceed to the election of 12 Directors to serve until next year's Annual Meeting of Stockholders. The Board has submitted the following persons for election as Directors of the Company -- Barbara Alexander, Sir Donald Cruickshank, Stephen Bennett, Raymond Dittamore, Thomas Horton, Dr. Irwin Mark Jacobs, Dr. Paul Jacobs, Dr. Robert Kahn, Sherry Lansing, Duane Nelles, Marc Stern, Brent Scowcroft.
These nominations need no second. Since no other Director nominations were received prior to the deadline specified in our bylaws and noted in last year's proxy materials, the nominations are now closed. The next item of business is the ratification of selection of PriceWaterhouseCoopers LLP as the independent accounts of the Company for the fiscal year ending September 27, 2009. Is there any discussion?
That concludes the proposals for today's meeting. I don't know if anyone picked up a ballot, but if you wish to vote by ballot on these matters, please hold your ballot up so that an usher can collect it. Oh yes, good. Have all ballots been executed and delivered? The time is now 9.44 and I declare the polls closed. Has the Inspector of Elections completed the tally?
PETER DESKOVITCH: Yes, Mr. Chairman.
IRWIN JACOBS: I now call upon the Inspector of Elections to report on the results of the voting.
PETER DESKOVITCH: Based on the proxies and ballots received, I can report that all nominees for Director have been elected to serve until next year's Annual Meeting of Stockholders. The selection of PriceWaterhouseCoopers LLP as independent accountants for the fiscal year ending September 29, 2009 has been ratified.
IRWIN JACOBS: Thank you. Thank you, all. A full tally of the votes will be published on our website in approximately two weeks and in our next quarterly report on Form 10-Q, which will be filed with the Securities and Exchange Commission. This concludes the formal business of our meeting. However, it was four years ago that I announced at our Shareholders Meeting that I was stepping down as the CEO, Chief Executive Officer. And the Board then selected Paul Jacobs to be the next CEO.
And over that four-year period I think Paul has done a very, very good job. Even despite certainly the current financial problems, the Company has done well. Paul and Bill will be presenting information on the progress for you to evaluate, but it really remains a very exciting company and in a very positive situation for the further expansion of cellular communications.
I have one another announcement. I think in continuing this transition, that as from this meeting I'll be stepping down as Chairman of Qualcomm. But as you voted, I will remain on the Board of Directors. I look forward to continuing to have interactions and to continue to provide support to the team and to continue to work with all the tremendous employees around Qualcomm.
So it's another step ahead and I think we have lots and lots of very positive things to look forward to. Finally, before we take action to adjourn, let me just make an announcement. There will be a video following this. And then Paul and Bill will be giving a presentation and then they will both be available, and any of us, available for questions. Is there a motion to adjourn the meeting?
UNIDENTIFIED COMPANY REPRESENTATIVE: I make the motion.
IRWIN JACOBS: Second?
UNIDENTIFIED COMPANY REPRESENTATIVE: I second the motion.
IRWIN JACOBS: Good, otherwise we'd have to keep going on and on. It has been moved and seconded that this meeting be adjourned. Hearing no objection, the meeting is adjourned. And actually I should add one more item before Paul steps up, that the broad intention is to appoint Paul as the next Chairman of Qualcomm. Thank you, all, very much.
PAUL JACOBS, CEO, DIRECTOR, QUALCOMM INC.: Good morning, everyone, and I want to welcome you to the O&M Jacobs Hall. Irwin didn't mention that, but I think it's very appropriate given the change that he's just announced. And I have to say, he's a man who has created tremendous opportunity for all of us, for the employees of this Company, for the wireless industry, for the San Diego community. And in fact, the ideas that were created here under Irwin's leadership literally have changed the world. And for that, I think we all owe him a huge round of thanks.
I'm extremely honored to follow in his footsteps. I said to people last night that he has very big shoes to fill. Fortunately he gave me big feet, so I hope that I can follow behind him and continue to lead the Company into this great opportunity that we have ahead of us. And I'm really honored that the Board has selected me to be the Chairman following Irwin.
And I've greatly enjoyed also being the CEO and I look forward to the many opportunities we have ahead. So maybe it's time to talk about some of those opportunities. So unfortunately, as you know, we're in a little bit of a legal hassle, so I have to put this up. Thank Don Rosenberg for this. But hopefully you have a chance to look at that. Let's get on to what the important things are.
So as Irwin said, I'll give you an overview of what's going on with the Company. Bill Keitel will get up and give you a financial overview. And then we'll have a question-and-answer session. And so hopefully, also, you've had a chance to be out in the lobby and outside and see some of the demonstrations that we've had out there. So you've had a chance to come to Qualcomm, see the campus and see some of the technologies that we've been working on.
So if we look back, boy, wasn't '08 a nice year in fiscal '08? I mean we had record revenues, as you see, up 25% year-over-year. Earnings were up 12% year-over-year. And we didn't just keep that money in the bank, we made sure that we returned it to our shareholders. So we paid out dividends and we bought back shares of the Company's stock.
Another great thing that happened last year was the ending of one of our legal battles, the battle with Nokia. And I was very proud to be a part of the team, but it was really run by Steve and QTL and we got this deal done. And this was something where we had two companies that really were battling each other, but they were companies that had a lot of respect for each other as well.
And so what's nice to see is that, following that deal, now we're working with them. And we're able to announce in the Mobile World Congress that we're actually going to be working together to put our chips into one of their phones for the American market. And we look forward to building beyond that to the global market with Nokia.
So it's a really nice transition for us. I think it's a great example of how the Company wants to partner with other companies to build this wireless ecosystem. We want to grow the pie more than it's about fighting for the scraps of the pie. And we're going to continue to have that mind set to go out and partner and continue to grow this industry.
So as I said, we've been focused on returning capital to shareholders. And I hope you have noticed that, we also, the Board voted to increase our dividend once again this year, by a penny. And that really shows a part of our confidence in how the Company is going to progress and the fact that we have been very profitable, we've had great cash flows and we have a very strong balance sheet.
So in the face of these economic conditions, when you see other companies having to reduce their dividend, Qualcomm continues to execute and be strong and be able to return capital to you, the shareholders. And we're very proud of that fact. Okay, so fiscal '09, what's going on? Well there's clearly a lot of uncertainty, I think everybody knows that. And maybe that's an under statement. But how has it actually impacted us?
Well we saw that our manufacturers, the manufacturers that buy chips from us, have actually contracted their inventory, meaning that they have less inventory on hand in the channel. The operators have somewhat reduced their inventories as well. And what that means is that we're actually shipping fewer chips into the channel, into the market.
So as an example, a few quarters ago we shipped 86 million chipsets, then down to 63 and now our estimates are somewhere in that 63 range right now. And so we see this actually persisting for a short period of time. What we're unsure of is when will the end-user demand create that pull through the channel and therefore the inventory levels will increase again. And so we're very cautious about that, we're watching very carefully. But in the meantime, we're trying to adapt our business to reflect that current reality.
And what's the good side? The good side is 3G adoption is continuing very strongly. I'm going to show you some charts coming up, but device unit growth is continuing. What that means is that the manufacturer is shipping 3G devices, are shipping many more this year than last year. I'm going to show you some more about that.
But another very interesting thing, even in this economy, people are still buying the higher end devices. So the wireless Internet has become a mainstream phenomenon and people are buying Smartphones. And those Smartphones have more capabilities in the chipset and more capabilities in the device, leading to …