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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 147.19-3.6%Feb 3 3:59 PM EST
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To: Boplicity who wrote (37820)8/8/1999 11:43:00 AM
From: Keith Feral  Read Replies (2) of 152472
 
Thanks for helping me understand your comment. It seemed out of line on the surface. Glad to understand the context behind it.

Back to the subject at hand, I don't understand the correlation between AOL and QCOM. I think the two stocks are fundamentally different in almost every way. AOL has almost no earnings, competitive advantage, IPR, or technology to propel its market leadership.

On the other hand, QCOM's PE is 1/10 of its EPS growth YOY, it's technology and IPR have excellent visibility, and it's market leadership with CDMA replacing GSM is a no brainer for the next 5 to 10 years. In short, the washout in AOL and the other internet stock is immaterial to the Q's direction.

Also, I do not think that MOT's entry into ASICS has any threat to QCOM. The main reason that I feel confident in QCOM's ASIC position in two fold. First, QCOM has superior technology. The high speeds QCOM has developed for it's Korean and Japanese customers is years ahead of anything that MOT can produce. ERICY has already committed to QCOM for the ASIC chips and I highly doubt NOK would switch from internal development to MOT's chip design.

Second, if licensed handset manufacturers buy their ASICS from anyone other than QCOM, they must pay higher royalties to the Q. That would kill the profit margins on their handsets. QCOM has defined every aspect of the CDMA market with its cross licenses to other equipment vendors. MOT is just blowing smoke because QCOM embarrassed them in court last week.

Regards
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