Some more info from the interview from Richard Sulpizio (RS): COO / President of Qualcomm with RadioWallStreet (RWS):
*RWS: Richard that last time we had Irwin on the show had he said that Qualcomm was going to make an acquisition and you certainly have made a large one. $ 1 Billion for SnapTrack.
* RS: Snaptrack is very exciting; Wireless Data is just starting to take off and will be part of the Wireless Industry going forward
* You want to know where the person is and where the handset is; there is a lot of services and functions to do that low speed data or voice can not do
* Snap Track is a heavily oriented engineering company since 1995 in San Jose, 40 engineers, working on a position locator for wireless since 1995
* ST have been accepted in Japan and we want to merge with our GPS1
* RWS : $ 1 Billion is a lot ?
* RS: No, we expect to increase marketshare in CDMA and be first to market
* The agreement with ST will be done in mid March and we expect no problems; they will be a wholly owned subsidiary; we have people there working with them on our strategic direction; they will be independent a
* This is a long term great buy for our shareholders
* It is must more than just 911, and a lot bigger than saying you are at the gas station, we are talking about Zone Base in building, someone with a handset in NewYork to only get advertising from banners on the internet from New York
* RWS: CDMA the standard for the next decade?
* RS: We are very bullish on the future, CDMA is the standard for 3G
* Steve, if is no longer of if the world is going to CDMA, it is just when
* Every carrier knows that their 2G system can not handle high-speed data
* High-speed data is a requirement for 3 G
* Japan, Europe, North America, Latin America; the future is in front of us, not behind
* RWS: How big will Qualcomm be in the future? for earnings?
* RS: Qualcomm is in Semi Conductors and how big do you think Wireless will be? Every CDMA product sold, Qualcomm gets a royalty. We are leaders in CDMA
* What about NOK, MOT, ERICY ? Will they cause a price reduction of your chip set?
* RS: NOK makes their own chip for their own phones, bout does not sell semi conductors, MOT does
* RS: we have the lead, We hare into the 6th generation CDMA chip and adding more features like the Snap track 1
*We feel very comfortable that we are ahead of the competition
* RWS: What about this volatile stock?
*RS: I tell employees do not worry about the stock price, obviously they look at it; I figure if we are in we are in the right industry, Wireless, and have the right product, CDMA, and execute on our strategy, CDMA with all these features, the stock price will look after itself
* What are the next steps?
* We are focusing on two areas: 1) Wireless Data: HDR - 2 Meg of data over a CDMA1 wireless channel and 2) semiconductors
* We are driving the technology to wireless data ( HDR )and will supply the chips for the next version of wireless - 3G
* What about margins? Will they increase with the phone div. sold?
* Margins on the royalties are good <GGG>
* Semiconductor margins are greater than the phone div.
* What are the expectation of margins in the future? How good should they be?
* It depends on two things: 1) Size of the Market and how fast it is growing
* Qualcomm receives a royalty based on the wholesale price when the licensee sells to the operator
* RWS: This sounds like Microsoft of the 80s and very unique? Who could slow you down?
* RS: Irwin had a vision in 1988-89 of CDMA; the others were looking at TDMA; CDMA was more complicated but the future unlike TDMA; Qualcomm had the engineers
* Qualcomm has all the patients and they are good for 17 years, some are from 1998, some from last week , some from yesterday
* RWS: Wow! This sounds like a quasi monopoly and a cash cow machine
* RS: No, not a monopoly; there are other manufactures ; but they all have to pay Qualcomm a small royalty
* RWS: What is next for competition to CDMA?
* RS: We do not see anything on the horizon for 10 to 15 years |
