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Pastimes : The New Qualcomm - write what you like thread.
QCOM 176.09+0.4%1:30 PM EST
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To: Jim Lurgio who wrote (1297)12/23/1999 2:49:00 AM
From: Maurice Winn  Read Replies (1) of 12240
 
***Handset Division*** Gregg and others [in SI] used to claim that the handset division had an advantage in that they didn't have to pay royalties or the margin on ASICs.

That used to drive me nuts. Gregg wouldn't answer my objections to that idea. He also thought it good that there be a fragmented 3G as it would mean more complexity which Qualcomm would excel at resolving compared with competitors. That idea drove me nuts too. I used to argue that Irwin Jacobs wanted a single, converged 3G so how did Gregg resolve that difference? My point was that even with a single standard, there would be a vast amount of work to be done and fortunes to be made without muddying the water unnecessarily.

Now, I'm very happy to be vindicated. Qualcomm did NOT accept that the handset division should ride on the back of royalties and ASICs. They couldn't compete and make high margins and mismanaged supply contracts [or otherwise ran short on parts], so it was sold to Kyocera, who could do a lot of stuff that Qualcomm couldn't. The handset division was much more valuable to Kyocera than to we shareholders, so we sold it.

I don't think there's more than meets the eye. Maybe there is, but the public reasons all are complete enough to explain it all.

I didn't think the handset division should be sold earlier in the year but with the loss of competitive position, there seemed little point in keeping it when Kyocera could do so much more with it. It's disappointing.

I now have to whittle my expectations down from Qualcomm being as big as Microsoft, Intel and IBM combined.

Then again, there are plenty more things to happen and the trend is still in the right direction.

Fortunately the trend has been to an increasingly converged 3G and we haven't seen the end yet.

The handset division helped make CDMA possible and at the outset came to the rescue in Hong Kong for the first ever commercial network [Motorola's - who were unable to supply handsets on time].

A new all-time high today of $522, which is $1044 in the old pre-split terms. Heck and wow!! Qualcomm's reality is now starting to match my dreams.

I was hoping for manufacture in China. It seems I might get my wish...from Gdichaz in the 'Serious' thread:
<...And KYO is already manufacturing phones in China, and has a joint venture with SK in Korea (which provides another entry to China). Watch what happens re China. (Remember the growth and earnings estimates currently factor in zero repeat zero for China - that may still be the case - total failure - but seems like the possibilites of more than zero are pretty good)
>
Mqurice
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