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Technology Stocks : The New Qualcomm - a S&P500 company
QCOM 162.38-1.6%9:46 AM EST
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To: quidditch who wrote (519)8/4/1999 1:05:00 AM
From: engineer  Read Replies (2) of 13582
 
Let me give a little history on the MOT/LU agreement. In the early days, PacBell funded CDMA before it split off Airtouch as a separate entity. this got the very first labratory demo system running. After that was demonstrated publically in Nov 1989, a consortium was formed to further fund the developpment of this technology. the original participants to this were AT&T (now LU), MOT, PacBell (Airtouch), Nynex, Ameritech. LU and MOT were given early better terms on the lic because they agreed to manufacture the equipment in the market. One of these terms was the ability to make CDMa ASICS for sale ONLY to licensees. they pay a royalty on the ASIC and the licesnees pay a royalty on the phone.

It is a good thing that MOT is selling ASICS in that it will grow the pie. If Qualcomm maintains 17% of hte pie and the pie grows by a factor of 10, then QCOm grows alot. they will still get a good royalty stream from eihter way Mot sells stuff.

As far as MOT making chipsets, they have been trying to do this since 1993. It is now 1999 and they have not even gotten the chipsets to work very well and they want to sell them. It will tend to decimate their phone design team in trying to support the chipsets to outside customers. I would expect it to take more than 3 years for them to suceed at this business, if at all.
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