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by: iron_air
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QUALCOMM's CONFIDENCE
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CEO Jacobs predicts rosy future for satellite operator, CDMA
By Staff Writer Rod Cant -- October 15, 1999: 7:35 a.m. ET
GENEVA (CNNfn) - Qualcomm Chairman Irwin Jacobs is optimistic about his wireless equipment
company -- confident in both the Globalstar satellite communications venture in which his company has
invested and a key wireless technology that is gaining acceptance worldwide.
Jacobs told CNNfn.com in an interview this week he believes Globalstar, which launched its service this
week at Telecom 99, has learned from the mistakes made by its two fallen rivals -- Iridium and ICO --
which have both filed for Chapter 11 bankruptcy protection.
"One, maybe two, players could do well," according to Jacobs, whose company owns a 6 percent stake in
Globalstar and is primary equipment maker for the satellite service provider.
Despite the doubts over the viability of a global communications network based on low-orbit satellites,
Jacobs, who founded Qualcomm, might be worth listening to.
Qualcomm (QCOM) is one of the hottest stocks on the U.S. market, its shares having risen above $200
from around $20 just a year ago.
That stellar rise is partly due to the growing use of the company's CDMA wireless technology around the
globe.
Handset buyers short listed: An announcement is expected shortly about the sale of Qualcomm's consumer
handset operation.
"We have a short list of buyers," confirmed Jacobs, who said he preferred a cash deal for the unit.
"Typically, the buyer will have to be a low-cost manufacturer, probably building computers or other
electronic-type equipment," he added.
Jacobs would give no figures for what he thought the business was worth, although analyst Mike Ching at
Merrill Lynch in New York calculated the unit would be sold for less than its annual revenue of some $1.5
billion.
Although the deal won't mean much to the $32 billion company in terms of finances, Ching said the real
benefit will be to allow Qualcomm to increase its focus on its more exciting and profitable activities "and will
get rid of a little volatility in earning."
CDMA technology is key: The key CDMA technology is crucial to the next generation of wireless telephone
services, when voice and data will be combined.
Jacobs was in Geneva to promote CDMA, whose progress has been dogged by disputes over patents and
opposing regional telecom standards. He admitted to frustration at the obstacles to the technology's
adoption.
"Sometimes we're not too popular," he confessed, referring to the company's energetic attempts to persuade
international regulators to open up to new technology.
"Sometimes it's worth banging on the door, there's so much money involved, the stakes are very high," he
said.
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