What is the Stock of the Week? Each week, we feature one stock that we believe has the potential to appreciate more than 10%. We search our databases, using complex mathematical relationships, to make our selections. Some of our previous choices are listed in the Performance Record and Previous Picks sections of our site. Feel free to visit those pages.
What is this Week's Selection? This week we are featuring one of the fastest growing companies in the United States, top ten percentage gainer on the Nasdaq in 1999 and true champion of equity investors worldwide. QUALCOMM Incorporated is a leading developer and supplier of digital wireless communications products and services and is the innovator and patent holder of CMDA, a technology that has become the world standard for the wireless communications industry. The stock trades on the Nasdaq National Market under the symbol QCOM. It is a member of the S&P 500 and Nasdaq 100.
Business Summary: QUALCOMM sells CMDA chip sets and software solutions, wireless phones, satellite-based management information systems (called OmniTracs) to the transportation industry and ground stations and phones for the Globalstar satellite communications system. The firm develops technologies for High Data Rate (HDR) applications and licenses its technology to CMDA manufacturers worldwide. QUALCOMM corporate structure includes the following four divisions: CDMA Technologies, Technology Licensing, Wireless Systems and Consumer Products.
What is CMDA?
QUALCOMM engineers pioneered development of a revolutionary digital wireless communications technology called Code Division Multiple Access (CMDA). For network operators, CDMA dramatically increases system capacity. For end-users, it enables superior voice quality, greater coverage and extended talk times. CDMA phones also offer a wide range of features such as Caller ID, hands-free calling and Internet data access. Today, CDMA has gained global acceptance and is the fastest growing digital technology, serving more than 40 million subscribers worldwide. As the primary developer of CMDA technology and a leading manufacturer of CMDA products and services, QUALCOMM currently licenses technology to more than 65 companies.
There are 2 types of digital signal standards. Time Division Multiple Access (TDMA) and Code Division Multiple Access (CDMA). TDMA gives a channel to a single user, time division systems divides it among multiple users -multiplexing- by switching quickly from user to user, effectively slicing up the channel into time slots that are distributed among the users contending for the channel. During any given time slot, a single user still has sole control of the channel, just as in a non-multiplexed system. In CDMA, everybody is using the same wide spectrum at once. Each user pumps out “frames” which are stirred together into a noisy digital soup. The classic analogy for multiplexing is a party where everybody is trying to talk. In time division, everyone takes turns speaking. In code division, everybody speaks at the same time, but in a different language. You only listen to the person who is speaking your language while everybody else fades into the background!
QUALCOMM went public in December of 1991, issuing 18.4 million shares at $4.00 each. Had you invested $1,000 (250 shares), how much would your investment be worth today? (01/14/00)
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