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Technology Stocks : Intel Corporation (INTC)
INTC 35.99+0.7%12:44 PM EST
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To: Jacques Newey who wrote (94806)1/1/2000 10:40:00 PM
From: Tony Viola  Read Replies (1) of 186894
 
Jacques, One would have thought that the mere mention of Intel in the same sentence with Qualcomm would have caused an instantaneous and meteoric rise in Intel's market cap.

There are other companies besides Intel that are in and out of licenses with Qualcomm for the rights to manufacture CDMA chipsets, whose stocks haven't taken off either. They are:

LSI Logic, which expects to grab some CDMA chipset market.

VLSI Tech, which Qualcomm is exercising an option to disqualify because they were bought by Philips.

Prairie, which is fabless, sometimes leading to chipless.

Lucent has some angle but I don't know what it is.

The reason why QCOM stock goes wild is because they will get a royalty on every CDMA chip that any of these other companies sells. Some say that 85% of cell phones will ultimately use CDMA technology. The other companies "just" get whatever profit is left over after costs, like with any other chip product. QCOM's position is like that of Rambus, without, however, the nightmare of problems that have beset RDRAM.

A CDMA contract by any of the other companies might produce a "guilt by association" spike in its stock price, but nothing like QCOM's insanity.

Tony
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