We are very pleased with the performance of our businesses this past year, particularly with the strong execution of our chipset business, our continued innovation and our successful settlement with Nokia.
We shipped 336 million chipsets this year, which represents a 33 percent growth from fiscal 2007. Revenues were up 27 percent year-over-year in our chipset business and 31 percent in our licensing business, generating strong cash flows and enabling us to continue our investment in R&D. Looking ahead, we are well positioned to continue our tradition of leadership with new technology innovations, new market opportunities and dynamic new partners to catalyze future growth.
While we continue to see strong growth in 3G CDMA and the long-term future of wireless technology is bright, the current macroeconomic conditions and potential for further economic slowdown create an uncertain business environment in the near term. The recent developments in the global economy have impacted our business and industry, as they have many other companies around the world.
We anticipate a significant reduction in customer orders for our chipsets in the first half of fiscal 2009 as network operators and wireless equipment manufacturers reduce their inventories in response to the current economic slowdown. In addition, while we expect strong growth for 3G CDMA devices in calendar 2009, it is significantly less than we initially forecasted.
Fiscal 2008 results included impairments to our marketable securities portfolio related to the recent disruption in the financial markets, and we have additional unrealized losses, which could result in significant additional impairments if market conditions do not improve. We have the intent to hold the majority of these securities — and we expect their value to substantially recover.
Although the current economic environment is uncertain, we are fortunate to participate in a vibrant and growing industry that provides products and services that are essential to consumers and critically important to enterprises. The chipsets and patented technology developed by Qualcomm continue to be the engine for a vast spectrum of wireless devices, creating a unique position for us in the marketplace.
Our strong R&D commitment and global engineering resources are vital to the success of our company and our industry. We continue to anticipate evolving market trends and to develop the mobile solutions of tomorrow.
Our new Snapdragon™ platform (with hybrid mode alternative) is a key enabling technology for a new generation of wireless devices that reflect the convergence of communications, computing and consumer electronics. We are pleased to have more than 30 designs in development for this breakthrough technology this year, and we expect commercial products to hit the market in 2009.
Our new Gobi™ mobile Internet solution (with hybrid mode alternative), a multimode chipset solution for notebook computers, enables enterprises and consumers to access the high-speed mobile Internet in virtually all parts of the world, in addition to providing GPS capabilities. Several of the world’s leading notebook manufacturers including Acer, Dell, HP, Lenovo, Toshiba and Panasonic are now embedding our solution into their products and more than 20 Gobi-enabled notebooks have been launched to date.
As a founding member of Google’s Open Handset Alliance, Qualcomm is investing considerable resources to support the Android™ platform. The first commercial device enabled by this Internet-savvy operating system launched this year using our chipset.
Our MediaFLO™ USA network is now providing live mobile television content to consumers via AT&T and Verizon Wireless, the two largest mobile operators in North America. Developed by Qualcomm, this groundbreaking service is putting mobile TV into the hands of consumers in 65 markets nationwide and is projected to be available in more than 100 markets by year-end 2009.
We continue to expand our strategic focus on business initiatives that support exciting new mobile services. Our Firethorn business is now collaborating with major banking institutions to make the convenience and security of the “mobile wallet” a reality for a growing number of people.
Qualcomm is also working to apply the power of wireless to health and wellness, forging new partnerships and innovating new technologies with the potential to improve and prolong quality of life. We are enabling breakthrough mobile devices and solutions that enhance communications between patients and healthcare professionals, assist with a variety of remote care scenarios and enable personal health management for consumers. We believe that wireless health technologies have the power to create efficiencies and quality improvements in the healthcare system, while helping people to better manage their own health.
Similarly, in areas relating to public and personal safety, we are leveraging our leadership in location-based services and position-location technology to offer solutions that can be used to help track family members, business assets and even pets.
We continue to expand our strategic focus on business initiatives that support exciting new mobile services.
Many of these initiatives are bringing new types of partners into the wireless industry ecosystem and enabling entirely new business models. Continually “mobilizing” the Web experience, Qualcomm engineers continue to inspire whole new categories of connected mobile devices, such as personal navigation devices, personal media players, cameras, e-book reading devices and pocketable computing devices.
To provide appropriate infrastructure for these ideas, we are developing intelligent networks and building on our heritage as a provider of expert support services that empower our operator partners and the customers they serve.
In July of 2008, we entered into a new ~15-year license agreement with Nokia, the world’s largest cell phone company, covering various wireless standards. The new license agreement reflects our strong intellectual property position across many current and future-generation technologies.
Qualcomm is well positioned for future wireless opportunities as the industry moves beyond the traditional wireless phone and into powerful wireless consumer electronics and computing devices. Our scale, solid balance sheet and strong operating cash flow provides us with the unique ability to continue to invest in innovative R&D programs and next-generation technologies, allowing us to grow our industry-leading product and intellectual property portfolios, improve our competitive position and open up exciting new markets for future growth.
We remain dedicated to delivering on our vision of a world in which everyone is seamlessly connected through the power and potential of wireless technology and services.
Dr. Paul E. Jacobs, Chief Executive Officer
Steven R. Altman, President
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