Might not be such a good bye! Check this out!!!
QUALCOMM Provides Update on Korean Market Impact and Other
Events - Company Expects Reduction in Second Quarter Earnings
From Prior Quarter -
SAN DIEGO, Feb. 5 /PRNewswire/ -- QUALCOMM Incorporated (Nasdaq: QCOM - news) today announced that it
expects a reduction in second quarter earnings and Communications Systems margin from the prior quarter, due primarily
to recent events involving its customers in South Korea.
Two Korean manufacturers have just requested a partial cancellation or postponement of second quarter orders of
Application Specific Integrated Circuits (ASICs). Further, following a recent visit to Korea, the Company concluded that
a previously announced order for 1800 MHz Q(TM) phones will not be fulfilled. Sales of the Q phone are expected to be
lower than planned in the second quarter due to the loss of the Korean order for 1800 MHz Q phones, the delay in
introducing the 800 MHz cellular Q phone, and a recent reduction in demand for 1900 MHz PCS Q phones. Demand for
the QCP models remains strong, and production ramp up at QPE continues.
''We are confident that, despite the current economic turmoil, the Asian markets including South Korea represent vibrant
long-term opportunities for QUALCOMM and CDMA,'' said Dr. Irwin Jacobs, chairman and CEO of QUALCOMM
Incorporated. ''We are working actively with our Korean customers to help them weather this difficult economic
downturn. CdmaOne(TM) technology continues to be rapidly deployed around the world.
Although the financial markets remain in a state of flux, we anticipate the weaker won will strengthen Korean suppliers in
their export of CDMA and other products in future quarters. Further, we do not believe that the economic downturn in
this region will delay global acceptance of cdmaOne, now present in more than 30 countries around the world.''
Despite the continuing ramp up in capacity at QPE, the Company is reducing its manufacturing workforce by
approximately 700 temporary workers this week. This reduction is partly due to the change in mix between the Q phone,
with its higher labor content, and the QCP portable phones, with their lower labor content, and partly to ongoing cost
improvements and increased manufacturing efficiencies. The Company previously indicated that temporary employment
levels at QPE vary with changes in production levels.
QUALCOMM continues to lead the evolution of cdmaOne, including higher data rates and capacity and the recent
successful demonstration of a GSM/CDMA overlay system. Looking forward, the Company notes the now central role
of the Company's technology in third generation (3G) systems, as indicated by the selection of W-CDMA by the
European Telecommunications Standards Institute (ETSI).
The Company plans a conference call at 5:30 p.m. Eastern time today to discuss these events and other issues of interest.
U.S. participants please call 1-800-205-9958, reservation number 3841892. International participants please call
1-415-908-4724, reservation number 3841892.
The re-broadcast of today's conference call will begin at 7:30 p.m. Eastern time today and will be available for three
business days. Domestic participants should dial, 800-633-8284 -- reservation number 3841892. International
participants should dial, 303-248-1201 -- reservation number 3841892.
Headquartered in San Diego, QUALCOMM develops, manufactures, markets, licenses and operates advanced
communications systems and products based on its proprietary digital wireless technologies. The Company's primary
product areas are the OmniTRACS(R) system (a geostationary satellite-based, mobile communications system providing
two-way data and position reporting services), CDMA wireless communications systems and products and, in
conjunction with others, the development of the Globalstar(TM) low-earth-orbit (LEO) satellite communications system.
Other Company products include the Eudora Pro(TM) electronic mail software, ASIC products, and communications
equipment and systems for government and commercial customers worldwide. For more information on QUALCOMM
products and technologies, please visit the Company's web site at qualcomm.com.
Except for the historical information contained herein, this news release contains forward-looking statements that are
subject to risks and uncertainties, including the Company's ability to successfully manufacture and sell significant quantities
of CDMA handsets, ASICs and infrastructure equipment on a timely basis, changes in economic conditions of the various
markets the Company serves including the Asian markets, continued currency fluctuations and risk, the ability to develop
and introduce cost effective new products in a timely manner, potential delays in the commercial implementation of the
Company's CDMA technology, continued growth in the CDMA subscriber population and the scale-up and operations
of CDMA systems, developments in current or future litigation, the Company's ability to effectively manage growth and
the intense competition in the wireless communications industry, risks associated with vendor financing, timing and receipt
of license fees and royalties, failure to satisfy performance obligations, as well as the other risks detailed from time to time
in the Company's SEC reports, including the report on Form 10-K for the year ended September 28, 1997 and most
recent Form 10-Q.
QUALCOMM, OmniTRACS and Eudora are registered trademarks of QUALCOMM Incorporated. Globalstar is a
trademark of Loral QUALCOMM Satellite Services, Incorporated. cdmaOne is a trademark of the CDMA
Development Group. |
