qualcomm annual reports 2001

Worldwide Locations >>

QUALCOMM Headquarters

5775 Morehouse DriveSan Diego, CA 92121(858) 587-1121 Phone (858) 658-2100 Fax

In The United States

Bethesda, MARYLAND

Boulder, COLORADO

Brentwood, TENNESSEE

Campbell, CALIFORNIA

Clemmons, NORTH CAROLINA

Chantilly, VIRGINIA

Concord, MASSACHUSETTS

Duluth, GEORGIA

Irving, TEXAS

Kansas City, MISSOURI

Las Vegas, NEVADA

Miami, FLORIDA

Pittsburgh, PENNSYLVANIA

Portland, OREGON

Richardson, TEXAS

Salt Lake City, UTAH

Scotts Valley, CALIFORNIA

Washington, D.C.

International Locations

Bangkok, THAILAND

Beijing, CHINA

Buenos Aires, ARGENTINA

Farnborough, ENGLAND

Gladesville, AUSTRALIA

Haifa, ISRAEL

Ho Chi Minh City, VIETNAM

Hong Kong, CHINA

Jakarta, INDONESIA

Mexico City, MEXICO

Moscow, RUSSIA

Munich, GERMANY

Munster, GERMANY

New Delhi, INDIA

Rome, ITALY

Sao Paulo, BRAZIL

Seoul, KOREA

Thame, ENGLAND

Tokyo, JAPAN

Toulouse, FRANCE

Waalre, HOLLAND

© 2001 QUALCOMM Incorporated. All rights reserved.All other trademarks are the property of their respective owners.12/01 CCL0157-1

We’ve opened the door to>

>>

2001 ANNUAL REPORT

p01

This year, the third generation of wire-

less communications became a reality.

It’s here, and QUALCOMM is enabling

it. Using first-to-market 3G technology

(called CDMA2000 1X), wireless operators

in South Korea are now offering com-

mercial high-quality voice and high-speed

data services to more than two million

people. As this report goes to press,

additional CDMA2000 1X networks are

coming online in the United States,

Brazil, Japan, Eastern Europe and New

Zealand and many more deployments

are being planned around the world. A

limited deployment of wideband CDMA

(WCDMA) has been fielded by NTT

DoCoMo in Japan.

Attractive 3G products and services are

here now, including position location

with downloadable local maps, multi-

media, games and streaming

video. Color screen handsets are hot

items. All this means new opportunities

for application developers, equipment

manufacturers and wireless service

providers. The next generation has

arrived. The wireless Internet is being

unleashed. QUALCOMM’s vision and

enabling technology are driving it. The

door is open to a whole new world.

QUALCOMM is the engine for advances in the wireless industry

QUALCOMM employees innovated and commercialized a revolutionary wireless

communications technology called Code Division Multiple Access (CDMA). This

technology spreads digital radio signals across the spectrum in a unique way that

allows multiple users to coexist in the same frequency without time sharing. The

benefits of this innovation are powerful.

CDMA enables wireless networks to greatly increase their capacity and broaden their

coverage areas. Users benefit from higher quality transmissions with fewer dropped

calls, improved voice quality and enhanced security. The new generation of this tech-

nology, called third generation or 3G, is delivering on the promise of the wireless

Internet by making always-on, high-speed data both accessible and economical.

Since its commercial introduction in 1995, QUALCOMM’s patented CDMA technology has

gained worldwide recognition and has become the engine for advances in the wireless

industry.

More than 100 million subscribers as of September 2001(Source: CDMA Development Group)

CDMA Subscriber Growth History(IN MILLIONS)

We’ve opened the door to the next generation of wireless communications >

LESS THAN 1M4.2

01009998979695

16.0

41.1

71.0

105.0

Headquartered in San Diego, California,

QUALCOMM employs 6,500 people in

offices at 40 locations in the United States

and around the world.

QUALCOMM works closely with manufac-

turers and wireless service providers

through strategic investments, joint

ventures and partnerships to promote

the benefits of CDMA technology and to

further evolve new technologies and

services worldwide.

Business areas include:

CDMA technology licensing

CDMA chipsets and system

software solutions

The BREW wireless

application platform

Satellite-based and terrestrial

fleet management solutions

Highly secure CDMA handsets

and deployment systems for the

United States government and

homeland security

Digital Cinema products

and technologies

QUALCOMM Incorporatedis a global leader in developing, delivering and enablinginnovative digital wireless communications products andservices based on the Company’s patented CDMA technology.www.qualcomm.com

QUALCOMM Internet Services QIS was formed to acceleratethe emergence of a genuinelyuseful wireless Internet,building on QUALCOMM’s new

Binary Runtime Environment for Wireless™

(BREW™) applications platform. The BREWplatform enables hardware manufacturersand software developers to quickly createnew products and applications. Wirelessservice providers then generate added revenues through new data offerings.Consumers benefit by being able to down-load and run exciting new applications ontheir wireless devices.

QUALCOMM Digital MediaQDM develops technologies tosupport the processing, trans-mission and management ofcontent for a variety of media

applications, including delivery of digitizedmotion pictures (“Digital Cinema”) and highly secure, wireless products for theU.S. government. QUALCOMM has appliedits expertise in image compression, secu-rity, digital communications and networksystem integration to develop an end-to-end Digital Cinema delivery and playbacksystem. Technicolor Digital Cinema, thejoint venture between QUALCOMM andTechnicolor®, has launched the commercialrollout of this system in the United States.

QDMQIS

QUALCOMM WirelessBusiness SolutionsQUALCOMM introduced its first wireless solution in 1988.Originally developed for

the long-haul trucking industry, theOmniTRACS® and OmniExpress® systemsnow provide mobile communications, positionlocation and fleet management solutionsfor over 400,000 vehicles in 32 countries.The QWBS Network Management Centerprocesses more than seven million trans-actions per day, making it one of theworld’s largest wireless data networks.

QWBS

QUALCOMM is included in the S&P 500 Index and is a 2001 FORTUNE 500® Company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.

>>QCOMQUALCOMM TechnologyLicensing QUALCOMM owns patents that are essential to all CDMAwireless standards. To date,

QUALCOMM has more than 1,900 U.S.patents and patent applications applicableto CDMA and other technologies. Throughthe efforts of QTL, the Company has licensedits essential CDMA patent portfolio to morethan 100 telecom equipment and consumerelectronics manufacturers worldwide.

QTL

QUALCOMM CDMATechnologies QCT is the world’s leadingdeveloper and supplier ofCDMA chipset solutions

used in network infrastructure equipment,handsets and other wireless devices.Among the features of the new generationof QCT products is gpsOne™, wireless posi-tion location technology facilitated bySnapTrack®, a wholly owned subsidiary of QUALCOMM. QCT provides products,software and services to the world’s leading CDMA manufacturers.

QCT

S T O C K H O L D E R I N F O R M AT I O N

ONLINE ANNUAL REPORT

We invite you to visit

www.qualcomm.com to view our

online interactive annual report. The

web-based report complements our

printed report to provide a better under-

standing of QUALCOMM Incorporated.

INVESTOR RELATIONS

>> Julie C. Cunningham

Senior Vice President,

Investor Relations

For further information on the

Company, additional copies of this

report, Form 10-K, the Proxy Statement

or other financial information, contact:

QUALCOMM Incorporated

Investor Relations

5775 Morehouse Drive

San Diego, CA 92121

(858) 658-4813 phone

(858) 651-9303 fax

You may also contact us by sending

email to [email protected] or by

visiting the Investor Relations page

on the Company’s website at

www.qualcomm.com.

TRANSFER AGENT

Computershare Investor Services, LLC

2 North La Salle Street

Chicago, IL 60602

(312) 588-4157

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP,

San Diego

CORPORATE COUNSEL

Gray Cary Ware & Freidenrich LLP,

San Diego

Julie C. CunninghamSenior Vice President, Investor Relations

Except for the historical information contained herein, thepreceding discussion contains forward-looking statementsthat involve risks and uncertainties. QUALCOMM’s futureresults could differ materially from those discussed here.Factors that could cause or contribute to such differencesinclude, but are not specifically limited to: potential declinesin the rate of growth in the Code Division Multiple Access(CDMA) subscriber base; risks associated with the scale-up,acceptance, and operations of CDMA systems, including HighData Rate, now known as 1xEV-DO (previously HDR), and 3Gtechnology; potential component shortages; risks associatedwith strategic opportunities or acquisitions, divestitures, andinvestments the Company may pursue, including investmentsin new ventures and operators; risks related to the ability to sustain or improve operational efficiency and profitability;risks relating to the success of the BREW business; changing global economic conditions, particularly in thetelecommunications and internet-related industries; inte-grated circuit inventory and order levels; the Company’sability to execute additional 3G licenses; changes in the fairvalues of marketable securities and derivative instrumentsheld; electricity outages or rolling blackouts; the develop-ment, deployment and commercial acceptance of evolvingCDMA technology standards; developments in current orfuture litigation; the ability to develop and introduce cost-effective new products in a timely manner; the Company’sability to effectively manage growth; the intense competitionin the wireless communications industry; risks associatedwith the timing and collection of license fees and royalties;risks associated with international business activities; andrisks related to accounts receivable and finance receivables,as well as the other risks detailed in the Company’s report on Form 10-K. The Company’s consolidated financial dataincludes SnapTrack, Inc. and other consolidated subsidiariesof the Company.

MARKET INFORMATION

The Common Stock of the Company

is traded on the NASDAQ Stock Market

under the symbol “QCOM.”

NOTICE OF ANNUAL MEETING

The annual meeting of stockholders

will be held at 9:30 a.m. PST, Tuesday,

February 12, 2002 at Copley Symphony

Hall, 750 B Street, San Diego, Calif.

p02

TO OUR STOCKHOLDERS:

2001 was a positive year forCDMA and for our Company >>

Despite a slowdown in the world economy, QUALCOMM

and our CDMA licensees this year entered major new markets,

grew in existing markets and introduced breakthrough products

including CDMA2000 1X, the Wireless Internet Launchpad™ and

the BREW platform. It was a period of slower growth for older and

non-CDMA wireless technologies.

Our business strategy is based on rapid innovation

and careful investment to spur the adoption of CDMA wireless

technology worldwide through clear competitive advantage.

Our intellectual property portfolio is an essential ingredient in

all CDMA-based network infrastructure equipment, and wireless

handsets and devices. We build stockholder value by generating

revenues through the licensing of our CDMA technology and

providing expert assistance, by supplying “chipsets” (integrated

circuits, system software and support), which incorporate ever

more attractive features for early-to-market, cost-effective

CDMA products and by enabling wireless software applications

through the BREW platform.

With CDMA now the chosen technology for third-

generation wireless voice and Internet access, QUALCOMM

Technology Licensing (QTL) this year achieved record revenues

and earnings. We now have over 100 CDMA licensees with

more than 50 companies licensed for WCDMA and TD-SCDMA.

Under the leadership of Don Schrock, QUALCOMM CDMA

Technologies (QCT) this year raised the competitive bar further

in the development and introduction of new families of chips

while maintaining growth in chip sales despite the generally

down market. QCT has now shipped a cumulative total of

over 525 million chips.

Commercially Deployed and Miles Ahead

QUALCOMM intends to remain the engine for advances in

the wireless industry. With people everywhere relying more and

more on mobile communications for business and personal

communications including entertainment, mobile commerce,

information, safety and education, we are constantly innovating

to expand and improve the “user experience.” We continue to

work closely with CDMA operators, supporting their priorities

in a timely and predictable fashion while driving down costs to

ensure them an attractive and profitable business.

A major milestone on our journey took place this year

when third-generation (3G) CDMA wireless technology became

a reality. Nationwide 3G networks based on QUALCOMM’s

CDMA2000 1X technology officially opened for business in South

Korea, with commercial launches by multiple carriers rapidly

attracting millions of subscribers. Sprint, Verizon Wireless and

other carriers are rolling out nationwide CDMA2000 1X networks

in the United States, launching with an exciting array of hand-

sets and applications. cdmaOne™ operators worldwide are ra-

pidly evolving their networks to 3G CDMA2000 1X. CDMA hand-

set production is quickly shifting to CDMA2000 1X, based on

pin-compatible QUALCOMM chipsets. This third generation of

wireless technology is now opening the door to a vast array of

features and services while unleashing the true power of wire

less Internet access.

Wireless service providers everywhere are planning

the evolution or replacement of second-generation systems by

third-generation networks, either CDMA2000 1X in existing and

new spectrum or WCDMA in new spectrum. We actively support

both forms of CDMA but believe that CDMA2000 1X is not only

first-to-market, but also the most powerful and cost-effective

choice. In support of all CDMA, we have formed a global

business development organization that integrates all of our

international efforts. Headed by Jeff Jacobs, this organization

is focused on driving worldwide market growth for CDMA.

China Deployments Moving Ahead As part of this

globalization effort, we have been particularly focused on two

markets with sizable growth potential—China and India. We

are assisting wireless service providers in both of these

markets as they seek to deploy and optimize networks for

the lowest cost.

In July of this year, China surpassed the United States

and became the world’s largest wireless market with over

120 million subscribers. The legacy cellular networks there are

based on the older GSM (Global System for Mobile communica-

tion) standard. However, China Unicom awarded approximately

$1.5 billion in contracts and has now deployed a first phase

nationwide cdmaOne network with capacity for 15 million

subscribers in over 200 cities. Further, China Unicom has

announced a second phase, including upgrades to CDMA2000 1X,

to accommodate an additional 20 million subscribers in 2002,

followed by a third phase supporting an additional 15 million

subscribers by 2003.

QUALCOMM has granted worldwide subscriber and

infrastructure licenses to a number of Chinese manufacturers.

Shenzhen Zhongxing Telecom Co. (ZTE) received a $120 million

first phase infrastructure contract to build CDMA networks

serving 1.1 million subscribers in China’s western provinces.

So far, 19 Chinese firms have been approved to produce CDMA

handsets for the network. We continue to provide extensive

technical support for the network deployment and are working

closely with Chinese manufacturers.

The government of India is also dedicated to providing

low-cost communications nationwide. This year, wireless local

loop operators were authorized to provide limited mobility,

allowing mobile services within extensive urban areas, and a

number of wireless local loop licenses were awarded. CDMA

is, of course, the technology of choice. Plans are underway for

CDMA base stations across most of India to be connected with

fiber links, making wireless voice and data communications

accessible, even in small villages. The Indian markets repre-

sent future growth opportunity for our Company. As with China

and other emerging markets around the world, QUALCOMM is

well positioned to benefit from the growing migration to CDMA

wireless technology.

Content Delivery Made Affordable In addition to

driving early global implementation of CDMA2000 1X networks

and developing WCDMA, we are working to commercialize our

high data rate technology solution, standardized as CDMA2000

1xEV-DO (Data Optimized). The architecture for this data-

optimized technology enables very high-speed Internet access,

with burst rates of up to 2.4 Mbps. Wireless communications

and the Internet are two of the most important inventions of

our time. Joined together and augmented by BREW applica-

tions, these technologies have the power to improve our lives

in new and meaningful ways. Both CDMA2000 1X and 1xEV-DO

support “always on” high data rate secure connections. The

door has opened to fast and practical access to e-mail, personal

information manager (PIM) functions, web browsing,

p03

Dr. Irwin Mark JacobsChairman of the Board and

Chief Executive Officer

p04

e-commerce, position location and navigation and multimedia,

with an ever-increasing menu of applications from developers

worldwide to be selected by subscribers and downloaded to the

phone using the BREW platform.

Constantly Driving More Advances As detailed in

the “Technology Roadmap” beginning on page 8 of this report,

QUALCOMM’s CDMA chipsets embody the most advanced

3G CDMA technologies, including CDMA2000 1X, CDMA2000

1xEV-DO and WCDMA modes. Under the leadership of Steve

Altman, the QUALCOMM Technology Licensing business

demonstrated our ability to earn royalties on all modes of

CDMA by successfully negotiating over 50 licensing agreements

with manufacturers of WCDMA and TD-SCDMA products. A key

milestone this year was the signing of a new multi-million

dollar agreement with Nokia, expanding the terms of our existing

subscriber cross-licensing agreement and adding a new

infrastructure equipment license. Nokia is the world’s leading

handset supplier and we look forward to working with them in

the effort to bring new, global 3G wireless solutions to market.

Given the large installed base of GSM and to help the

migration of GSM networks to 3G CDMA, we are committed to

delivering multi-mode, multi-band chipsets supporting one

or more flavors of CDMA together with GSM/GPRS. These

multi-mode, multi-band chips will enable “world phones”

and other wireless devices to provide truly global roaming

and ubiquitous interoperability without user intervention.

A breakthrough initiative in QCT this year was

the development of radioOne™ architecture. This innovation

eliminates the need for intermediate frequency conversion,

saving cost, size and power by allowing manufactures to design

multi-band wireless devices with fewer parts, smaller form

factors and improved talk and standby times. We plan to

introduce radioOne architecture in our 3G MSM6000 family

of chipsets in 2002.

Another revolutionary technology debut this fiscal

year was our gpsOne position location solution. In response

to the FCC mandate, QUALCOMM and SnapTrack have been

working for several years on an Enhanced 911 (E911) solution

that integrates position location capability into the chips that

drive wireless handsets and devices. Called gpsOne, this tech-

nology enables wireless service operators to provide police and

other public safety officials the ability to locate wireless callers

in emergency situations. gpsOne provides significant cost,

time-to-market, and performance advantages, and has been

adopted by CDMA carriers around the world.

Motivated by the tragic events of September 11, the

FCC has been asked to tighten requirements to include the

ability to locate wireless callers inside large structures, including

subway stations, office buildings or schools. Our technology

already works wherever cellular calls can be received and/or

GPS satellites viewed and generally exceeds the FCC accuracy

requirement by directing emergency service workers within 10

to 30 meters of the caller.

In 2001, gpsOne was deployed in Japan with great

success and in October Sprint PCS began selling phones

containing chips with this technology in the United States.Other wireless service providers are rapidly coming online.

The solution is technology-agnostic and works on all types of

wireless networks. To demonstrate, we conducted successful

tests over GSM networks in Paris, Bonn, London and other

locations this year, which included cross-border roaming.

In April, a security company initiated gpsOne-

enabled service over KDDI’s cellular system in Japan and

quickly received 70,000 orders. In the first few days, the

service was able to locate a little girl lost in a large park in

Osaka. This promising technology has also been deployed

over NTT DoCoMo’s PDC cellular network in Japan.

Dr. Paul E. JacobsExecutive Vice President and

Group President, QUALCOMM Wireless

and Internet Group

Kimberly M. KoroSenior Vice President and

President, QUALCOMM

Digital Media

Donald E. SchrockExecutive Vice President and

Group President, QUALCOMM

CDMA Technologies Group

Chris A. WolfeSenior Vice President and

President, QUALCOMM

Wireless Business Solutions

p05

Scott J. BeckerSenior Vice President and

General Manager, QUALCOMM

Wireless Systems

Cool Data and Multimedia Applications

QUALCOMM is driving the convergence of wireless access

and data applications on several levels. At the chipset level,

QUALCOMM’s Wireless Internet Launchpad suite offers many

integrated capabilities for position location, multimedia, stor-

age, connectivity and user interface functions. To leverage

these features, our QUALCOMM Internet Services business,

headed by Peggy Johnson, developed the BREW platform.

QIS, which was launched this year, became part of the new

QUALCOMM Wireless and Internet Group under the direction

of Paul Jacobs.

The BREW initiative provides developers with a stan-

dardized platform that allows rapid development of applications

that are downloadable into BREW-enabled handsets and devices.

The applications they create are distributed with QUALCOMM’s

assistance to the wireless service providers who can benefit by

expansion and differentiation of their services. Consumers

benefit by having instant access to easily downloadable applica-

tions such as games, music players, “nanny cams,” real-time

traffic reports, maps, chat and messaging, m-commerce and

personal and Internet information. On the business-to-business

side of the market, QUALCOMM subsidiary Wireless Knowledge

is using the BREW platform to develop enterprise solutions

such as corporate e-mail and contact management and field

asset tracking. Initially a joint venture with Microsoft, Wireless

Knowledge acquired Microsoft’s interest and became a

QUALCOMM subsidiary in November under the leadership

of Eric Schultz.

Carriers, Developers and Manufacturers Agree

By aligning our business units and development efforts toward

a common goal, QUALCOMM achieves many important synergies.

Our CDMA technology expertise improves our chipset designs.

Our chipsets are powering new BREW-based wireless data

applications. Ultimately, the growing popularity of wireless data

services will fuel added demand for CDMA, and for higher-end

devices that take advantage of its ever-increasing capabilities.

This growth cycle is key to QUALCOMM’s continued success.

Future growth for our Company is also fueled by

investments in research, development and strategic entrepre-

neurial activities. As the recognized expert in CDMA, we play

a vital role in creating new industry standards that help move

the technology forward. We incorporate these standards into a

range of CDMA chipsets and software. To foster the develop-

ment of compelling new products and services, we invest our

financial and intellectual capital into promising early stage

companies and joint ventures. We also make strategic invest-

ments in carriers in places like North America, Brazil, South

Korea, Australia and elsewhere around the world. As part of

that continuing effort to expedite deployment of CDMA, last

year we formed QUALCOMM Ventures with a plan to invest up

to $500 million over a four-year period.

Through a joint venture with Technicolor, QUALCOMM

is applying its technology expertise to digital motion picture

delivery and playback. This year we began marketing ABSolute™

image compression technology, a highly efficient solution

developed specifically for Digital Cinema. This technology greatly

reduces the amount of digital information needed to represent

high-quality digital images. From the studio master to the

theater’s digital projection system, the QUALCOMM Digital

Media (QDM) division has developed a comprehensive solution

with the potential to transform the motion picture industry.

Under the leadership of Kim Koro, QDM together

with Technicolor Digital Cinema presented a comprehensive

business and technical strategy to the industry this year, and

demonstrated QUALCOMM’s compression technology at a major

Jeffrey A. JacobsSenior Vice President and

President, Global Development

Peggy L. JohnsonSenior Vice President and

President, QUALCOMM

Internet Services

Steven R. AltmanExecutive Vice President

and President, QUALCOMM

Technology Licensing

Anthony S. ThornleyExecutive Vice President,

Chief Operating Officer

and Chief Financial Officer

p06

industry conference. In December, QDM’s technology gained

national visibility with the first commercial rollout by Technicolor

Digital Cinema of our digital cinema system featuring a digital

release of the Warner Bros. Pictures’ Ocean’s Eleven movie.

In another key business area, QDM is under contract

to build initial quantities of highly secure handsets for the U.S.

government. These handsets operate nationwide on CDMA

cellular infrastructure, and can contribute to the homeland

security initiatives. Under the leadership of Scott Becker, this

Fall the QUALCOMM Wireless Systems division demonstrated

a set of aviation safety solutions taking advantage of the

Globalstar™ Satellite Communications System. Using that

pipeline and our onboard technology system (called MDSS),

we demonstrated in flight a number of safety and security

applications including live video streaming from cabin and

cockpit to ground. Globalstar offers the highest data rate of

any mobile satellite telephone system, and is the only satellite-

based system to use QUALCOMM’s CDMA technology.

Communicating with Drivers and Mobile Assets

QUALCOMM’s Wireless Business Solutions (QWBS) supplies

fleet tracking and communications services primarily to the

long-haul trucking industry. High fuel prices and economic

conditions have pressured the transportation industry this

year. However, the division has shipped a cumulative

total of over 400,000 OmniTRACS satellite-based systems, and

continued to gain acceptance of our CDMA-based terrestrial

OmniExpress system. We also acquired the assets of the Eaton

Corporation Trucking Information Services, which allows us to

provide enhanced logistics management applications on our

MVPc™ in-vehicle computer.

As part of our vertical market strategy, we signed

a purchase agreement with Roadway Express, the largest

less-than-truckload carrier in the United States, to supply our

OmniExpress system. Under the leadership of Chris Wolfe,

QWBS announced the formation of a wireless heavy equipment

consortium and signed industry leaders to broaden the scope

of the division.

Finally this year, QWBS introduced a new BREW

application called OmniOne™, a low-cost transportation applica-

tion for digital handsets that will provide trucking companies,

affiliate fleets and subcontractors a powerful, portable commu-

nications tool that enables drivers and dispatchers to receive and

send load assignments, status updates and other information.

Given the challenging business environment and

global economy, we did not achieve our financial goals in 2001.

However, our Company posted very solid results this year and

set the stage for substantial future growth. We remain confi-

dent in our overall business strategy. I’m pleased to report

that despite global economic pressures, we expect to grow

revenues and profits in 2002 as 2G and 3G CDMA systems are

deployed around the world.

After the implementation of the Securities and

Exchange Commission Staff Accounting Bulletin No. 101 this

fiscal year, pro forma revenues were $2.7 billion, flat from

the year ago period. However, two of our core businesses,

Technology Licensing and CDMA Technologies, grew their

respective pro forma revenues in fiscal 2001. Pro forma earnings

per share were $0.98 in fiscal 2001, compared to $1.01 in the year

ago period. QUALCOMM’s cash, cash equivalents and marketable

debt securities totaled approximately $2.4 billion at the end of

the fourth quarter, and we have essentially no debt.

QUALCOMM is fully committed to an aggressive

R&D program aimed at stimulating our market and growing

our business. We are continually adapting our Company to

meet changes in the environment. As part of that strategy this

year we created two major groups headed by Paul Jacobs and

Don Schrock. We also added chief operating officer responsibil-

ities to Tony Thornley, who continues to serve as the Company’s

chief financial officer. I’m quite proud of our entire executive

team and all the employees at QUALCOMM who are working

hard to create value for stockholders by growing our business

and building on our successes.

Thank you for continuing to support QUALCOMM

and its vision.

Dr. Irwin Mark Jacobs

Chairman & CEO

p07

QUALCOMM plays a vital role in creating wireless technologies that are transforming

global communications. The Company holds over 1,900 patents (issued or pending)

and receives royalties from intellectual property by licensing technologies to over 100

manufacturers, including virtually every leading telecom equipment and consumer

electronics brand name in the world.

Combining engineering know-how with management vision and marketing insight,

QUALCOMM has become the world’s leading designer and supplier of CDMA chipsets

and system software. These key components are used in network base stations,

handsets, modems and a variety of new wireless communications products.

TECHNOLOGY LEADERSHIP:

Innovation is the heart and soul of our business >>

Technology leadership and vision

The QUALCOMM competitive edge is

the end result of contributions by many

outstanding engineers. This year, we

are pleased to provide special recogni-

tion as QUALCOMM “Distinguished

Technical Fellows” to three innovative

engineers for their technical leader-

ship and key contributions to CDMA.

Working together with our chief techni-

cal officer, Dr. Roberto Padovani and

our chief scientist, Franklin Antonio,

they have helped select, train and

inspire many talented engineers to

envision and bring to market a broad

product and intellectual property port-

folio. Our new Distinguished Technical

Fellows are executive and senior vice

presidents with many years of experi-

ence in spread spectrum technology.

QUALCOMM Technology Leaders featured from left to right: ButchWeaver, Dr. Klein Gilhousen, Dr. Roberto Padovani, Dr. CharlesWheatley and Franklin Antonio.

Among them, they hold hundreds of

patents on CDMA and communications

techniques and devices and are broadly

recognized as authorities in the field of

wireless communications technology.

We are pleased to name as Distinguished

Technical Fellows, Dr. Klein Gilhousen,

who served as a founding member of the

board of directors; Dr. Charles Wheatley

and Butch Weaver, both of whom joined

QUALCOMM shortly after its founding.

p08

In 1999, the International Telecom-munications Union adopted an industrystandard for the third generation ofwireless technology, called IMT-2000.Third-generation (3G) wireless technol-ogy more efficiently supports voice andhigh-speed data services, deliveringexciting new features and changing theway we communicate. The IMT-2000 3Gstandard encompasses three differentCDMA operating modes, CDMA2000,WCDMA and TD-SCDMA.

QUALCOMM supports all CDMAmodes. CDMA2000 1X is first-to-market.Since it evolved from previous generationsof commercially deployed and successfulCDMA systems, CDMA2000 1X is now fullycommercial with a growing variety offeature-rich handsets. CDMA2000 1Xnow is the most cost-effective andspectrally efficient third-generationCDMA mode.

QUALCOMM supports industry choices, working to enhance CDMAstandards and provide early chipsets forWCDMA and multi-mode phones thatwork on GSM as well as CDMA networks.The people at QUALCOMM CDMATechnologies are enabling the future ofcommunications by working with wirelessservice providers and manufacturers toprovide the best chipsets, system

software solutions and development tools for CDMA handsets, networks andembedded applications.

The solutions on this page represent thestate of the art in Mobile Station Modem(MSM) technology. These chipsets are

key components for the manufacture of wireless devices. Each is designed to deliver choice and flexibility for devel-opers and wireless service providers by addressing specific market require-ments for price point, feature set androaming capabilities.

INVESTING IN R&D:

We have a roadmap for the future >>The standard for the next generation of wireless technology

CDMA2000 1X

MSM6000MSM5010MSM5000

MSM6050MSM5105

MSM6100MSM5100

ZIF

14.4kbpsQ1’02SAMPLES

H2’02SAMPLES

EVRCtwo way SMS

BREW

Q 3’01SAMPLES

153kbps

153kbps

Q1’00SAMPLES

CDMA2000 1X

Q 4’00SAMPLES

CDMA2000 1X CDMA2000 1X

Q 1’01SAMPLES

CDMA2000 1X CDMA2000 1X

CDMA2000 1X

ZIFMIDI, CMX

New memoryinterface

BREWR-UIM

153kbps

MIDICMX

R-UIMBREW

gpsOne ZIFJava H/W

New memoryinterface,

BREWstreaming video

gpsOne

BluetoothUSB, MP3MIDI, CMX,

MMC, R-UIMBREW

307kbps 307kbps

Q1’02SAMPLES

gpsOne

CDMA2000 1X

Voice two way SMS

p09

KEY

Bluetooth A global specification for wireless connectivity. It allows replace-ment of the cables that connect deviceswith one universal short-range radio link.

BREW (Binary Runtime Environment for Wireless) QUALCOMM’s applicationdevelopment platform.

CMX (Compact Media Extension) A MIDI-based multimedia software.

EVRC (Enhanced Variable Rate Vocoder)

gpsOne A solution for wireless positionlocation technology in a mobile handsetfor CDMA cellular and PersonalCommunications Service (PCS) networks.

GSM/GPRS Data Supports Phase 2+ ofGSM and GPRS class 12 data services.

Java H/W Accelerator A new memoryinterface.

MIDI (Musical Instrument Digital Interface)A digital music generator technology.

MP3 An audio standard enabling highquality music reproduction.

MMC (Multimedia Card) An interfaceenabling removable memory for data storage and transfer.

R-UIM (Removable User Identity Module)

SMS (Short Messaging Service)

USB (Universal System Bus) A device controller.

ZIF (Zero Intermediate Frequency)Introduced by QCT as radioOne‚ thisarchitecture radically improves the way radio signals are converted in aCDMA handset.

CDMA2000 1xEV-DO WCDMA GLOBAL ROAMING

MSM6200MSM5200

MSM5500

MSM6300

MSM6500

MSM6600

ZIF

BluetoothMIDI, MP3

new memoryarchitectureCMX, BREW

BluetoothMIDI, MP3


BluetoothMIDI, MP3

CMXBREW

WCDMAGSM/GPRS384kbps 384kbpsQ3’01

SAMPLESWCDMA

2.4MbpsQ2 ’01SAMPLES

H1’02SAMPLES

H1’02SAMPLES

gpsOne ZIF

307kbpsCDMA2000 1X

GSM/GPRS

CDMA2000 1X1xEV-DO

GSM/GPRS

CDMA2000 1XWCDMA

GSM/GPRS

CDMA2000 1XCDMA2000

1xEV-DO

gpsOne ZIF

ZIF

307kbps (CDMA2000 1X)

2.4Mbps (CDMA2000

1xEV-DO)

307kbps (CDMA2000 1X)

384kbps (WCDMA)

CY’03SAMPLES

gpsOne

Voice & datasolution, MIDIMP3, BREW

supports all MSM5100 features

gpsOne

BluetoothMIDI, MP3


CY’03SAMPLES

p10

3G

REAL 3G NETWORKS:

The door opened to third-generationwireless technology this year >>

3G CDMA means fast & affordable wirelessInternet services >> Wireless service providers are

increasingly looking toward mobile

data as a key driver for future revenue

and earnings growth. It follows that

quality of service and the cost to deliver

data traffic will be key differentiators.

To be competitive, operators must

quickly select and deploy the most

efficient 3G solutions.

Data “throughput” capacity drives

network economics and “peak” data

rates affect the user experience.

QUALCOMM’s CDMA2000 1xEV-DO

technology offers the greatest

competitive advantage because it is

optimized for data throughput. The

ability to offer higher throughput,

peak data rates and, therefore, higher

performance service at a substantially

lower cost creates significant compet-

itive advantage for operators.

As the year drew to a close, China’s second largest mobile wireless service provider

neared completion of its initial $1.5 billion IS-95A CDMA network. China Unicom

deployments will cover over 200 cities in the world’s largest wireless market. The

first commercial 3G networks based on QUALCOMM’s CDMA2000 1X technology

launched in South Korea and will soon launch in the United States.

Looking ahead, new 3G deployments are in progress or now being planned in Japan,

Brazil, Australia, New Zealand, North America, India, Southeast Asia, Central and

South America and other emerging markets around the globe.

p11

is here

With Proven

Performance Advantages

For wireless service providers, the

promise of increased capacity and

higher data rates became a reality this

year. 3G networks are already serving

millions of paying subscribers.

First-to-market with a commercial net-

work based on QUALCOMM’s CDMA2000

1X technology, South Korea’s SK Telecom,

added over 687,000 people to its sub-

scriber base in just three months, and

estimated it would pass the three million

milestone by year-end.

In the same part of the world, Korea

Telecom Freetel (KTF) deployed a

CDMA2000 1X network that is already

offering data speeds of up to 153 kbps.

KTF also began a trial of QUALCOMM’s

high data rate technology. Complying

with QUALCOMM’s HDR specs (the basis

of the CDMA2000 1xEV-DO standard),

the trial successfully enabled streaming

video, web browsing and e-mail at fast

data transmission speeds of up to

2.4 Mbps.

And An Easy Migration Path

From entry-level, “voice-only” networks

to feature rich, high-end voice/data

solutions, QUALCOMM supports wireless

service providers around the globe by

providing flexible technology choices,

which allow for a speedier, cost-effective

migration path to the 3G world.

The engineers in the QUALCOMM CDMA

Technologies Group include easy migra-

tion into the designs of the chipsets that

are at the heart of network base stations

and subscriber devices. Making the

transition from 2G CDMA to 3G CDMA

can be a simple matter of switching

pin-compatible chips and performing

a software upgrade.

For today’s wireless service providers,

CDMA technology offers significant

competitive advantages. It builds on an

installed base of over 100 million users.

And the path to the future is both easy

and economical.

Cost-Effective Data Delivery for Wireless Service ProvidersTECHNOLOGY NETWORK NETWORK

EXPENSE2/MB1 EXPENSE2/MONTH1

GPRS $ .42 $ 83

WCDMA .07 14

CDMA2000 1X .06 12

CDMA2000 1xEV-DO .02 4

1 Assuming 15% traffic volumes at busy hours and 200 Mbytes/month per subscriber per month, 2x5 MHz available for data traffic

2 Assumes dense data traffic environment, >7500 kbps/sq km3 Network Expense: network operations expenses plus

capital depreciation

Source: QUALCOMM: “The Economics of Mobile Wireless Data”http://www.qualcomm/main/whitepapers/WirelessMobileData.pdf

The Best User Experience for SubscribersAIR INTERFACE EFFECTIVE DOWNLOAD TIME

PEAK DATA RATE (3-MIN. SONG)

GSM 9.6 kbps 41 minutes

IS-95A CDMA 14.4 kbps 28 minutes

GPRS 57.6 kbps 7 minutes

IS-95B CDMA 64.0 kbps 6 minutes

CDMA2000 1X 307 kbps 78 seconds

WCDMA 2,000 kbps 12 seconds

CDMA2000 1xEV-DO 2,400 kbps 10 seconds

p12

Samsung Video On Demand phone Cyberbank PC-Ephone

REAL 3G DEVICES & SERVICES:

Exciting new products areentering the market

Useful new features are becominga reality >>

>>

enabledYiso FREEWING YM-1031K modem card

Position Location

Developed by QUALCOMM and its

SnapTrack subsidiary, the gpsOne solu-

tion enables wireless service providers

to offer police and other public safety

entities the ability to locate wireless

emergency E911 callers. Other location

based services enabled by gpsOne

include; personal navigation, mobile

yellow pages, location-based games

and entertainment, property and stolen

vehicle recovery. SnapTrack’s patented

architecture offers anytime, anywhere,

accurate, high-speed location of a wire-

less caller, even inside buildings where

wireless signals can be received but

conventional GPS does not operate.

The solution works on all air interfaces

including CDMA, TDMA, GSM, iDEN and

3G networks. The first gpsOne commer-

cial product was deployed in Japan in

April 2001. Numerous other United

States wireless service providers,

including Sprint, Verizon Wireless,

ALLTEL, and Qwest will shortly

offer the service.

p13

Multimedia Software

QUALCOMM’s Compact Media

Extension (CMX) solution supports

playback of MIDI-based music, including

downloadable ring-tones with up to 16

simultaneous tones, audio, text, anima-

tion and graphics on wireless handsets.

Designed for use across QUALCOMM’s

Mobile Station Modem (MSM) solutions,

beginning with the MSM3100, CMX is also

a key component of QUALCOMM’s Wireless

Internet Launchpad suite — which

offers powerful, built-in functionality

to device manufacturers.

User Identity

CDMA2000 1X device manufacturers can

now support “Smart Card” products via

Removable User Identity Modules

(R-UIMs). As a value-added service,

operators will be able to store a sub-

scriber’s identity in a single removable

card, making global roaming across

different networks or even countries

easier. Smart Cards allow subscribers

to exchange handsets while using the

same card to maintain all personal and

billing information.

Expanded Data Capabilities

In August, QUALCOMM and Nortel

Networks demonstrated the industry’s

first Mobile Internet Protocol (IP) call.

Until now, wireless data users were

only able to access “islands” of mobility.

Mobile IP is a solution that allows

data to be transferred anywhere across

3G networks, enabling “always on”

access. Users are able to roam freely

without interruption.

by CDMASK Teletech, Sky IM-3100 camera phone

Enabled by QUALCOMM’s 3G CDMA technology, the list of remarkable CDMA2000 1X

wireless devices in production numbers more than 70 and is growing rapidly and

gaining economies of scale. The Company supplies chipsets, system software

solutions and support to the majority of industry leading CDMA manufacturers.

In addition, QUALCOMM earns royalty revenues by licensing third parties to

design, manufacture and sell products utilizing its patented technology.

More than 100 companies are now licensed to manufacture

CDMA equipment. The list includes more than 40 makers of

base stations and testing equipment for CDMA network

infrastructure deployments. And this year, over 40 handset

manufacturers have placed orders for chipsets for use

inside 3G phones and other devices based on

QUALCOMM’s CDMA2000 1X technology.

p14

Developers are truly unleashing the power of the wireless Internet with new applications

and content thanks to a new wireless application development platform from QUALCOMM

called BREW (Binary Runtime Environment for Wireless). Developed by QUALCOMM Internet

Services, this breakthrough platform provides a standardized framework that supports the

development of applications that users can download wirelessly to their BREW-enabled

handsets. It’s also a business model for monetizing wireless networks by driving demand

for high-speed wireless applications.

A PLATFORM FOR ENABLING THE WIRELESS INTERNET:

QUALCOMM is giving people a reason to use wireless data >>

BREW-ing a New Business

Model >>

The Wholesale DistributorQUALCOMM serves as thewholesale “distributor” (themiddleman) for developersand carriers.

The SupplierThird party developersare the “suppliers” intothe distribution channel.

The StoreThe wireless devicebecomes the “store”through which subscribersmake direct purchases ofapplications.

The RetailerThe wireless serviceprovider acts as the“retailer,” handling billingand using applications formarket differentiation.

new applic

p15

The door opened wide to the wireless

Internet this year when Korea Telecom

Freetel (KTF), a leading South Korean

CDMA wireless service provider, rolled

out the first commercial BREW-enabled

applications and services to subscribers

in November. The service allows KTF

subscribers to easily customize their

handsets with a variety of wireless

applications, including games and

entertainment options as well as

messaging and navigation services.

When KTF launched its public trial of

the BREW-enabled service in Seoul in

September, participants were selected

from more than 200,000 consumers

who registered online to try out the new

services. More than 160 applications are

currently available. The user experience

includes 3D graphics, the ability to

download applications over the air,

and streaming video on handsets with

color displays.

The growing list of companies support-

ing the BREW initiative includes wireless

service providers, device manufacturers

and application developers. Service

providers already include ALLTEL, Bell

Mobility, Bell South in Guatemala,

Telcel, Iusacell, KDDI, KTF, Leap,

LG Telecom, Pegaso, Saskatchewan

Telecommunications,Telcel-Bell South,

Telesp Cellular, Unicom Horizon, Verizon

Wireless and Vesper.

Device manufacturers now using the

BREW platform include 3G Cellular,

Appeal, AirPrime, Cyberlane, Denso

International America, Denso Corporation

of Japan, Etronics, Hanwha, Hitachi, Ltd;

Hyundai, Intercube, KTF Technologies,

Kyocera, LG Electronics, PC-Phone,

Panasonic, Samsung Electronics, SANYO,

Sharp, Synertek, Telson, Toshiba, and

ZTE.

QUALCOMM recently formed the BREW

Developer Alliance Program to support

applications developers. Its membership

features well known companies inclu-

ding Mattel, Primedia, Sega, World

Wrestling Federation Entertainment

(WWFE) and many others.

As BREW-enabled services become

commercially available, interest continues

to grow, as demonstrated by the more

than 10,000 downloads of the BREW

Software Development Kit. Consistent

with the QUALCOMM business model

of promoting CDMA worldwide, BREW is

expected to drive demand for high-speed

data and the high-end device market.

Brew In Action >>

Clockwise from top left, courtesy of: Com2uS Corporation; Navitime MapData: CopyrightShobunsha Publications; Anicom Software Co., Ltd.; JAMDAT, Mattel, Inc. ©2001; Togabi.

BREW-enabled wireless handsets and devices will allow users toaccess an exciting array of down-loadable programs.

BREW In Action >>

ations & content

FY99 FY00 FY01

$862

REVENUES

EBT

$2,465

$2,712

$1,277

$2,680

$1,214

FINANCIAL HIGHLIGHTS:

Pro Forma (unaudited) >>

Pro Forma Revenue and EBT(IN MILLIONS)

FY99 FY00 FY01

8.7%

R&D

% OF REV

$215

$30011.1%

$409

15.3%

Pro Forma Research and Development(IN MILLIONS)

Cash, Cash Equivalents andMarketable Debt Securities(IN MILLIONS)

0.0

0.5

1.0

1.5

2.0

2.5

FY99 FY00 FY01

$1,495

$2,095

$2,381

p16

The full audited consolidated financial statements for fiscal 2001 can be found

in QUALCOMM’s Form 10-K, the Proxy Statement for the 2002 Annual Meeting

of Stockholders and on QUALCOMM’s website at:

www.qualcomm.com

or contact:


(858) 658-4813 phone

(858) 651-9303 fax

During the fourth quarter of fiscal 2001, the Company adopted the Securities and

Exchange Commission’s Staff Accounting Bulletin No. 101 (SAB 101) and applied the

effect retroactively to the beginning of fiscal 2001.

All results presented in this Summary Annual Report are SAB 101 adjusted. SAB 101

changes the timing of revenue recognition related to certain license fees and hardware

product sales.

p17

(a) Excludes certain asset impairment and othercharges and credits related to the Globalstar busi-ness, as follows: $49.3 million in cost of revenues,$519.0 million in asset impairment and relatedcharges, $9.9 million in investment income and$47.1 million in other non-operating charges.

(b) Excludes the employer payroll taxes payable for employee income from non-qualified stockoption exercises, as follows: $3.9 million in cost of revenues, $5.9 million in R&D expenses and $2.9 million in SG&A expenses.

(c) Excludes the amortization of goodwill and otheracquisition-related intangible assets primarilyassociated with the purchase of SnapTrack as follows: $1.2 million in cost of revenues and$254.8 million in amortization of goodwill other acquisition-related intangible assets.

(d) Excludes certain credits related to the reduction of reserves established in connection with the saleof the terrestrial-based CDMA wireless infrastruc-ture business, as follows: $1.8 million in cost ofrevenues and $2.5 million in SG&A credits.

(e) Excludes certain asset impairment and othercharges related to the exited analog-only cellular-untethered trailer-tracking management systembusiness, as follows: $4.6 million in cost of revenues, $0.4 million amortization of goodwill and other acquisition-related intangible assets, $2.2 million in asset impairment and relatedcharges and $2.3 million in investment expense.

(f) Excludes $5.2 million in employee terminationcharges, a $2.3 million gain on a sale of fixedassets, and $2.4 million in initial public offeringcharges related to the cancellation of the QUALCOMM Spinco IPO.

(g) Excludes a $3.1 million adjustment to reducereserves established related to the sale of the terrestrial-based CDMA wireless consumer phone business.

(h) Excludes certain asset impairment and othercharges related to the Vesper Companies andVeloCom, as follows: $31.8 million in asset impairment and related charges, $89.8 million in investment expense and $119.9 million in other non-operating expenses.

(i) Excludes net charges related to an arbitrationdecision against the Company, as follows: $61.7 million in other operating expense and $7.5 million in interest expense.

(j) Excludes $243.3 million in unrealized losses ofderivative instruments, $147.6 million in unreal-ized other-than-temporary losses on marketablesecurities and other investments, $37.5 million inunrealized other-than-temporary losses in otherinvestments and $0.5 million in net realized gainon a investment related to the impairment of itscost basis in prior periods.

(k) Excludes $17.9 million for the cumulative neteffect of the adoption of FAS 133 and SAB 101.

(l) The diluted share base used for the reportedresults excludes the potential dilutive effect of51.2 million common share equivalents related to outstanding stock options, calculated using thetreasury stock method, as these shares areanti-dilutive. For pro forma results, these sharesare dilutive and are, therefore, included in the pro forma per share calculation.

Twelve Months Ended September 30,

2001 2001 2000 %

Reported Adjustments Pro Forma Pro Forma Change

Revenues $2,679,786 $ — $2,679,786 2,712,035 (1%)Operating expenses:

Cost of revenues 1,035,103 (57,197) a,b,c,d,e 977,906 1,067,218 (8%)

Research and development 414,760 (5,938) b 408,822 300,130 36%

Selling, general and administrative 367,155 (5,639) b,d,f 361,516 281,261 29%

Amortization of goodwill and other

acquisition-related intangible assets 255,230 (255,230) c,e — —

Asset impairment and related charges 549,783 (549,783) a,e,g,h — —

Other 50,825 (61,674) i (10,849) —

Total operating expenses 2,672,856 (935,461) 1,737,395 1,648,609 5%

Operating income 6,930 935,461 942,391 1,063,426 (11%)

Interest expense (10,235) 7,545 i (2,690) (2,204) 22%

Investment (expense) income, net (255,999) 530,022 a,e,h,j 274,023 228,586 20%

Distributions on Trust Convertible

Preferred Securities of subsidiary trust — — — (13,039) (100%)

Other (167,001) 167,001 a,h — —

(Loss) income before income taxes

and accounting change (426,305) 1,640,029 1,213,724 1,276,769 (5%)

Income tax expense (104,501) (320,302) (424,803) (472,838) (10%)

(Loss) income before accounting change (530,806) 1,319,727 788,921 803,931 (2%)

Accounting change, net of tax (17,937) 17,937 k — —

Net (loss) income $ (548,743) $ 1,337,664 $ 788,921 $ 803,931 (2%)

Net (loss) earnings per common share:

Diluted $(0.73) $0.98 $1.01 (3%)

Shares used in per share calculations:

Diluted 755,969 51,188 l 807,157 800,121

Pro Forma Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except per share data)

QUALCOMM is providing the reported and unaudited pro forma (see notes (a) thru (l)) consolidated financial results below so that investors can compare our results from ongoing operations with and without non-recurring charges or credits. Pro formaearnings differ from reported earnings, which are presented in accordance with generally accepted accounting principles.

p18

INVESTING IN THE FUTURE:

The spirit of QUALCOMM isfocused on people >>

Leading our industry, our Company and our community

“An investment in knowledge always pays the best interest,” said Benjamin Franklin,

and that philosophy is evident at QUALCOMM. Built on the spirit of invention,

QUALCOMM is committed to continuous learning for its people and is strongly

connected to the community at large. With two former professors among its

founders, the Company has long appreciated the fact that investing in training and

education is essential for corporate growth and competitive advantage in a business

where knowledge is the principal currency. To that end, QUALCOMM is comprised

of an exceptionally well-educated work force of 6,500 people who come from over

100 different countries and speak more than 50 different languages. That diversity

and focus on continuous learning is really central to the spirit of QUALCOMM.

Investing in training and education

Through its university relations program,

the Company hires hundreds of college

interns every year and many return as

full-time employees. QUALCOMM also

educates thousands of industry profes-

sionals through its CDMA University and

BREW Developer Training programs.

From computer software training to

management and leadership skills, the

QUALCOMM Learning Center offers a

wide range of classes and resources.

By working closely with its business

units to develop customized curricula and

bringing in the most respected experts as

speakers and instructors, the Learning

Center creates programs focused on

results, enabling employees to apply their

knowledge directly to their work.

Acknowledging the importance of

that effort, this year QUALCOMM was

named to the Training magazine list

of the “Top 50 Training Organizations

in America.” Also this year, Human

Resource Executive, a leading HR busi-

ness magazine, named Dan Sullivan,

Ph.D., QUALCOMM’s Executive Vice

President of Human Resources, the

2001 HR Executive of the Year.

p19

Investing in the community

The people at QUALCOMM are

committed to being good corporate

citizens and good neighbors in the

communities they call home. In the spirit

of volunteerism, last year more than

1,000 QUALCOMM employees donated

approximately 10,000 hours of their time

to non-profit causes. That spirit is

manifested in a number of QUALCOMM

community outreach programs such as:

The 100 Best Companies to Work

for in America™ (FORTUNE) (1999-2001)

FORTUNE’s 100 Fastest-Growing

Companies in America™

FORTUNE 500® (1999-2001)

The FORTUNE 50

Forbes 500’s ANNUAL DIRECTORY

The Forbes ASAP Dynamic 100

Forbes Platinum 400

Business Week Information

Technology 100

Business Week “Hottest of the Hot”

The Business Week Global 1000

Industry Week’s 100 Best

Managed Companies

Top 100 Companies to Excel in

the 21st Century

S&P 500 Index

NASDAQ 100 Index

Deloitte & Touche 500 Fastest

Growing Technology Companies

Electronic Business Top 200

Companies

QUALCOMM’s awards andhonors include >>

QUALCOMM MatchingGrants. Provides dollar-

for-dollar matchinggrants for employee

donations to any qualifyingnon-profit organization.

QUALCOMM CorporateGiving. Donates a portionof the Company’s funds to

community causes.

QUALCOMM Kids.Provides QUALCOMM

Stadium tickets to children who might not

otherwise be able toattend a professional

sporting event.

High Tech High. One of thefirst tuition-free, publicly

and privately fundedcharter schools of its kind.

QUALCOMM Cares.Connects our volunteers

with non-profit organizations serving

a wide range of community needs.

Bridging the DigitalDivide. QUALCOMM hascommitted $25 million

over five years for programs that will helpstudents prepare for anincreasingly technology-

driven society.

Dr. Daniel L. SullivanExecutive Vice President, Human Resources

p20

Board of Directors, Officers& Stock Information >>B O A R D O F D I R E C T O R S


Chairman of the Board of Directors

and Chief Executive Officer,


Dr. Richard Atkinson

President of the University

of California

Adelia A. Coffman

Financial Consultant

The Honorable Diana Lady Dougan

Chairman, Cyber Century Forum and

Senior Advisor, Center for Strategic

and International Studies

Neil Kadisha

Chief Executive Officer,

Omninet Capital

Dr. Robert E. Kahn

Chairman and Chief Executive Officer,

the Corporation for National

Research Initiatives

Jerome S. Katzin

Retired, Investment Banker

Duane A. Nelles

Certified Public Accountant

Peter M. Sacerdote

Advisory Director,

Goldman Sachs & Co.

Frank Savage

Chairman and Chief Executive Officer,

Savage Holdings LLC

General Brent Scowcroft

President, The Scowcroft Group

Marc I. Stern

President, The TCW Group, Inc.

Richard Sulpizio

Former QUALCOMM President

C O R P O R AT E O F F I C E R S


Chairman of the Board of Directors

and Chief Executive Officer

Steven R. Altman

Executive Vice President and President,

QUALCOMM Technology Licensing

Franklin P. Antonio

Executive Vice President and

Chief Scientist

Scott J. Becker

Senior Vice President and

General Manager, QUALCOMM

Wireless Systems

Kimberly M. Koro

Senior Vice President and President,

QUALCOMM Digital Media

Jeffrey A. Jacobs


Global Development

Dr. Paul E. Jacobs

Executive Vice President

and Group President, QUALCOMM

Wireless and Internet Group

Margaret L. “Peggy” Johnson


QUALCOMM Internet Services

Kevin J. Kelley

Senior Vice President, External Affairs

Louis M. Lupin


General Counsel

Dr. Roberto Padovani


Chief Technical Officer

Donald E. Schrock


Group President, QUALCOMM CDMA

Technologies Group

Dr. Daniel L. Sullivan

Executive Vice President,

Human Resources

Anthony S. Thornley

Executive Vice President,

Chief Operating Officer and

Chief Financial Officer

Chris A. Wolfe


President, QUALCOMM Wireless

Business Solutions

Headquartered in San Diego, California,

QUALCOMM employs 6,500 people in

offices at 40 locations in the United States

and around the world.

QUALCOMM works closely with manufac-

turers and wireless service providers

through strategic investments, joint

ventures and partnerships to promote

the benefits of CDMA technology and to

further evolve new technologies and

services worldwide.

Business areas include:

CDMA technology licensing

CDMA chipsets and system

software solutions

The BREW wireless

application platform

Satellite-based and terrestrial

fleet management solutions

Highly secure CDMA handsets

and deployment systems for the

United States government and

homeland security

Digital Cinema products

and technologies

QUALCOMM Incorporatedis a global leader in developing, delivering and enablinginnovative digital wireless communications products andservices based on the Company’s patented CDMA technology.www.qualcomm.com

QUALCOMM Internet Services QIS was formed to acceleratethe emergence of a genuinelyuseful wireless Internet,building on QUALCOMM’s new

Binary Runtime Environment for Wireless™

(BREW™) applications platform. The BREWplatform enables hardware manufacturersand software developers to quickly createnew products and applications. Wirelessservice providers then generate added revenues through new data offerings.Consumers benefit by being able to down-load and run exciting new applications ontheir wireless devices.

QUALCOMM Digital MediaQDM develops technologies tosupport the processing, trans-mission and management ofcontent for a variety of media

applications, including delivery of digitizedmotion pictures (“Digital Cinema”) and highly secure, wireless products for theU.S. government. QUALCOMM has appliedits expertise in image compression, secu-rity, digital communications and networksystem integration to develop an end-to-end Digital Cinema delivery and playbacksystem. Technicolor Digital Cinema, thejoint venture between QUALCOMM andTechnicolor®, has launched the commercialrollout of this system in the United States.

QDMQIS

QUALCOMM WirelessBusiness SolutionsQUALCOMM introduced its first wireless solution in 1988.Originally developed for

the long-haul trucking industry, theOmniTRACS® and OmniExpress® systemsnow provide mobile communications, positionlocation and fleet management solutionsfor over 400,000 vehicles in 32 countries.The QWBS Network Management Centerprocesses more than seven million trans-actions per day, making it one of theworld’s largest wireless data networks.

QWBS

QUALCOMM is included in the S&P 500 Index and is a 2001 FORTUNE 500® Company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.

>>QCOMQUALCOMM TechnologyLicensing QUALCOMM owns patents that are essential to all CDMAwireless standards. To date,

QUALCOMM has more than 1,900 U.S.patents and patent applications applicableto CDMA and other technologies. Throughthe efforts of QTL, the Company has licensedits essential CDMA patent portfolio to morethan 100 telecom equipment and consumerelectronics manufacturers worldwide.

QTL

QUALCOMM CDMATechnologies QCT is the world’s leadingdeveloper and supplier ofCDMA chipset solutions

used in network infrastructure equipment,handsets and other wireless devices.Among the features of the new generationof QCT products is gpsOne™, wireless posi-tion location technology facilitated bySnapTrack®, a wholly owned subsidiary of QUALCOMM. QCT provides products,software and services to the world’s leading CDMA manufacturers.

QCT

S T O C K H O L D E R I N F O R M AT I O N

ONLINE ANNUAL REPORT

We invite you to visit

www.qualcomm.com to view our

online interactive annual report. The

web-based report complements our

printed report to provide a better under-

standing of QUALCOMM Incorporated.

INVESTOR RELATIONS

>> Julie C. Cunningham

Senior Vice President,

Investor Relations

For further information on the

Company, additional copies of this

report, Form 10-K, the Proxy Statement

or other financial information, contact:


Investor Relations

5775 Morehouse Drive

San Diego, CA 92121

(858) 658-4813 phone

(858) 651-9303 fax

You may also contact us by sending

email to [email protected] or by

visiting the Investor Relations page

on the Company’s website at

www.qualcomm.com.

TRANSFER AGENT

Computershare Investor Services, LLC

2 North La Salle Street

Chicago, IL 60602

(312) 588-4157

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP,

San Diego

CORPORATE COUNSEL

Gray Cary Ware & Freidenrich LLP,

San Diego

Julie C. CunninghamSenior Vice President, Investor Relations

Except for the historical information contained herein, thepreceding discussion contains forward-looking statementsthat involve risks and uncertainties. QUALCOMM’s futureresults could differ materially from those discussed here.Factors that could cause or contribute to such differencesinclude, but are not specifically limited to: potential declinesin the rate of growth in the Code Division Multiple Access(CDMA) subscriber base; risks associated with the scale-up,acceptance, and operations of CDMA systems, including HighData Rate, now known as 1xEV-DO (previously HDR), and 3Gtechnology; potential component shortages; risks associatedwith strategic opportunities or acquisitions, divestitures, andinvestments the Company may pursue, including investmentsin new ventures and operators; risks related to the ability to sustain or improve operational efficiency and profitability;risks relating to the success of the BREW business; changing global economic conditions, particularly in thetelecommunications and internet-related industries; inte-grated circuit inventory and order levels; the Company’sability to execute additional 3G licenses; changes in the fairvalues of marketable securities and derivative instrumentsheld; electricity outages or rolling blackouts; the develop-ment, deployment and commercial acceptance of evolvingCDMA technology standards; developments in current orfuture litigation; the ability to develop and introduce cost-effective new products in a timely manner; the Company’sability to effectively manage growth; the intense competitionin the wireless communications industry; risks associatedwith the timing and collection of license fees and royalties;risks associated with international business activities; andrisks related to accounts receivable and finance receivables,as well as the other risks detailed in the Company’s report on Form 10-K. The Company’s consolidated financial dataincludes SnapTrack, Inc. and other consolidated subsidiariesof the Company.

MARKET INFORMATION

The Common Stock of the Company

is traded on the NASDAQ Stock Market

under the symbol “QCOM.”

NOTICE OF ANNUAL MEETING

The annual meeting of stockholders

will be held at 9:30 a.m. PST, Tuesday,

February 12, 2002 at Copley Symphony

Hall, 750 B Street, San Diego, Calif.

Worldwide Locations >>

QUALCOMM Headquarters

5775 Morehouse DriveSan Diego, CA 92121(858) 587-1121 Phone (858) 658-2100 Fax

In The United States

Bethesda, MARYLAND

Boulder, COLORADO

Brentwood, TENNESSEE

Campbell, CALIFORNIA

Clemmons, NORTH CAROLINA

Chantilly, VIRGINIA

Concord, MASSACHUSETTS

Duluth, GEORGIA

Irving, TEXAS

Kansas City, MISSOURI

Las Vegas, NEVADA

Miami, FLORIDA

Pittsburgh, PENNSYLVANIA

Portland, OREGON

Richardson, TEXAS

Salt Lake City, UTAH

Scotts Valley, CALIFORNIA

Washington, D.C.

International Locations

Bangkok, THAILAND

Beijing, CHINA

Buenos Aires, ARGENTINA

Farnborough, ENGLAND

Gladesville, AUSTRALIA

Haifa, ISRAEL

Ho Chi Minh City, VIETNAM

Hong Kong, CHINA

Jakarta, INDONESIA

Mexico City, MEXICO

Moscow, RUSSIA

Munich, GERMANY

Munster, GERMANY

New Delhi, INDIA

Rome, ITALY

Sao Paulo, BRAZIL

Seoul, KOREA

Thame, ENGLAND

Tokyo, JAPAN

Toulouse, FRANCE

Waalre, HOLLAND

© 2001 QUALCOMM Incorporated. All rights reserved.All other trademarks are the property of their respective owners.12/01 CCL0157-1

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2001 ANNUAL REPORT

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