As other CFOs count their pennies, William Keitel of Qualcomm Inc. is deciding how to spend them. The San Diego-based wireless-technology concern has a lot of pennies these days, because it holds the patents for code-division multiple access (CDMA) technology, which is expected to be the dominant technology for the next generation of wireless communications. Keitel's challenge as Qualcomm's new CFO is figuring out how to invest the company's free cash, estimated at $1.5 billion in 2002.

Growing CDMA And Royalties

The patents mean Qualcomm earns royalties on the sale of every cellular phone that uses CDMA technology. That translates into about 30% of its 2001 revenues of $2.7 billion. Qualcomm uses its free cash to encourage the adoption of CDMA and keep that royalty engine humming. Indeed, promoting CDMA is the company's "No. 1 mission in life," says the 49-year-old Keitel, who had been Qualcomm's controller before being promoted last month. "As CDMA grows, obviously our royalty business is directly affected." Growth in the use of CDMA should also mean more opportunities for Qualcomm's chip business, he adds.