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Technology Stocks : The New Qualcomm - a S&P500 company
QCOM 174.810.0%Dec 26 9:30 AM EST
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To: w molloy who wrote (4445)12/22/1999 7:30:00 PM
From: John Biddle  Read Replies (2) of 13582
 
This is one of many reasons why NOK would have been a better partner.

NOK was not a possibility. They had no need of Qualcomm's handset division. Look, they are the world's largest seller of cell phones, and they are growing at an astonishing clip. The champ does not buy hand me downs from 8th place challengers. Don't dwell on how bad a decision Q made to skip over NOK, NOK wasn't interested.

However, CDMA is growing faster than all other technologies, and for NOK to keep their commanding lead, let alone to increase it, they must become leaders in CDMA as well as GSM and TDMA. To do this they will most likely have to buy ASICs from someone since they have shown themselves not yet up to the task. Whoever they buy from, Q makes good money, either as profit margin on the chip sale or as a royalty on the non-Q chip and an increase in the phone royalty for using another's chip.

Sale to KYO will help increase the pressure on NOK to get their CDMA house in order. The faster this happens, the more likely it is that they will buy chips rather than make them. NOK making their own chips yields least money to Q of available alternatives.

Like others I would like to see the details of this deal, especially the price. Given all I have seen, however, I think it's great.
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