Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 166.05

+0.6%

3:59 PM EST

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To: RoseCampion who wrote (40943)	9/14/1999 1:21:00 PM
From: mauser96	Read Replies (1) of 152472

Qualcomm may be in a similar position to AT&T prior to the spin off of Lucent. This spin off was very successful because AT&T competitors could buy Lucent products without enriching their competitor. Personally, I don't think that QCOM should continue putting money in a low margin business that will likely be captured eventually by the Japanese and Koreans. If they can do it with almost every other consumer electronic product, why not cell phones? Eventually mobile phones will become more of a commodity, and the closer they get to this point the more market share will be taken by companies like Sony. According to a recent Solomon Smith Barney report this would also be the most profitable outcome for the Q. The big profits are in royalties,licenses and ASIC sales. Like the infrastructure business, the manufacturing business has served it's purpose and it's time for QCOM to move on. Subcontracting out manufacturing wouldn't alter the fact that everytime a company like Nokia buys a chip from QCOM , they are enriching a direct competitor in mobile phones.

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