JP Morgan, Analysts Name Geiling>
Lower prices are cutting into operating margins at other phone makers, too. First-half operating margin
at Ericsson, the world's No. 3 cell-phone maker, slipped to 1 percent from 13 percent a year earlier.
The company expects its margin to pick up next year, when it unveils new models.
Nokia has operating margins of 18 percent to 20 percent in its handset business, while Motorola's are
about 10 percent, Geiling said.
Network Unit
Qualcomm's plan to sell the phone-making business comes after months of speculation that began
when the company agreed to sell its unprofitable network-infrastructure unit to Ericsson in March.
Qualcomm President Rich Sulpizio ruled out a sale of the phone-making business in April.
Now, the company said it wants to find a buyer that will assume its workforce and supply its customers.
''We will continue to support our customers and employees through an orderly transition,'' Paul Jacobs,
Qualcomm's president of consumer products, said in a statement.
Nokia, Motorola and Ericsson aren't likely to buy the Qualcomm unit, Geiling said. That leaves
companies such as Samsung Corp., Alcatel SA, Kyocera Corp., Royal Philips Electronics NV and
Matsushita Electric Industrial Co., maker of the Panasonic brand, to seek a stronger presence in the
U.S. market, where Qualcomm is the No. 2 seller of CDMA phones.
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