W-CDMA NOTES FROM FIRST UNION SECURITIES, INC.
-- The European market may be slowly opening to QUALCOMM. We believe
that the EU is going to relent and allow carriers to adopt any of the
3G technologies and not mandate only W-CDMA.
-- We believe that ETSI, the EU standard setting body has voted to
allow European carriers to adopt any of the proposed ITU 3G
technologies. We have not been able to confirm the decision or the
terms with ETSI.
-- QUALCOMM will probably receive royalties on W-CDMA anyway.
However, if carriers in Europe can opt to adopt any of the ITU 3G
modes it potentially could open the market for QUALCOMM to also sell
chips and accelerate the timing.
-- We reiterate our Strong Buy on the shares.
[My comments]
If Europe and USA move toward open standards this will give QCOM and excellent chance to make this a proprietary/open standard. This is a discontinuous technology shift from the old TDMA/GSM technology because everyone will need to get new equipment, the infrastructure must adapt to it, etc. Industries like NOK, ERICY, MOT etc. do not want many standards because it drives their cost up. Thus, they will want to standardize on the de facto QCOM standard of CDMA. So far NOK has not succeeded in making a CDMA chip. Eventually, if all goes well they and others will simply buy CDMA from QCOM. Now, also consider than hand held phones/computers are going to far out strip desk top computers. |
