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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 178.29-1.6%Dec 12 9:30 AM EST

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To: Cooters who wrote (89051)12/5/2000 2:11:46 PM
From: William Hunt   of 152472
 
TI, Qualcomm enter cross-licensing deal
Agreement allows patent sharing for wireless products

12/05/2000

By Leah Beth Ward / The Dallas Morning News

Texas Instruments Inc. said Monday that it has reached an agreement with wireless technology company Qualcomm Inc. that lets the companies cross-license each other's patent portfolios.

The development gives TI an important asset in the coming competition for next-generation cell phone technology. The deal also allows global sharing of TI's patents for digital signal processor and analog chip technology. The chips work in tandem to convert real-world sounds such as voice and music into digital data.

Qualcomm will share its patent for a wireless standard called CDMA, as well as other patents filed before the end of 2005. CDMA stands for code-division multiple-access.

There is considerable debate over whether CDMA will be the standard for high-speed data transmission. But TI last summer deemed the technology critical enough to pay $475 million for Dot Wireless Inc., a San Diego chip company founded by former Qualcomm engineers.

"TI is very well-positioned and far ahead in the race to 3G [third-generation technology]," said spokeswoman Tish LeBlanc. "Everyone else is still in the starting blocks."

TI's software already has been chosen by Nokia Oyj, Ericsson Inc., Sony Corp. and Handspring Inc. for their next-generation cell phones or wireless data terminals.

The cross-licensing applies also to Spinco, the temporary name of a spin-off planned by Qualcomm. Spinco will supply integrated circuits for all wireless and wired applications.

TI is the world leader in chips for cell phone technology and has said that it was prepared for the next generation with or without Qualcomm's technology. The company declined to elaborate on what pushed the two parties' patent lawyers to an agreement.

Not all the news was good for TI on Monday. The company was swept up in news of slower worldwide growth in semiconductor sales. Worldwide semiconductor sales in October rose at the slowest pace since April, according to the Semiconductor Industry Association, an industry group. SIA called the development a sign of weakening demand for the chips that power personal computers and cell phones.

It's too soon to tell how the holiday season will shape up, SIA analyst Doug Andrey said. He's still calling for a "fairly good year" in 2001, with 22 percent growth for the industry.

Shares of TI have slipped 18 percent this year. However, the stock closed up $1.25 Monday at $39.

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