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Technology Stocks : QUALCOMM-The Wireless Wonder in 1999

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To: Carter Patterson who wrote (79)2/10/2000 8:36:00 AM
From: r.edwards  Read Replies (1) of 343
 
Interactive Week from ZDWire
Copyright (c) 2000 ZD Inc. All Rights Reserved.
In using its market-cap muscle to buy up SnapTrack in late January, Qualcomm latched onto as
many as 50 patents governing how wireless service providers pinpoint the location of callers.
SnapTrack (www.snaptrack.com) holds 14 patents for global positioning system (GPS) technology,
with another three dozen patents pending. Qualcomm (www.qualcomm.com) will add SnapTrack's
patents to its intellectual property rights (IPR) portfolio with an eye toward exacting royalty fees from
wireless handset makers that use its technologies.

"This could be a good move for Qualcomm their business is IPR," says Elliott Hamilton, an analyst at
The Strategis Group. "If they think SnapTrack's patents are so good that other companies can't get
around them, then all of the CDMA [Code Division Multiple Access] and GSM [global system for
mobile communication] handset manufacturers will have to pay royalties to Qualcomm."

SnapTrack's patents cover one of two ways that wireless network operators can deploy GPS in
their networks. SnapTrack has developed technology for handset-based GPS, in which
location-tracking technology is built into wireless handsets or other handheld devices. The alternative
approach is network-based GPS, under which location tracking is handled by wireless base stations.

Although network-based GPS is available for wireless networks based on analog, GSM and Time
Division Multiple Access technologies, network-based products for CDMA are scarce, Hamilton
notes. That means Qualcomm will have an inside track in licensing both CDMA and GPS technology
to handset manufacturers.

The Federal Communications Com mission (www.fcc.gov) has mandated that U.S. wireless network
providers implement GPS by October 2001 to enable emergency service operators to pinpoint the
location of a wireless call to within 400 feet. The FCC last September ruled that wireless operators
can use either network-based or handset-based technology.

Expensive deployment

Because of the expense involved in deploying GPS, wireless operators are expected to piggyback
other location-based services on their systems. One expected service is to sell advertising that lets
retailers send alerts to mobile subscribers when they travel near their stores or outlets.

SnapTrack claims its location-based technology can pinpoint a caller's whereabouts to within 5 to 20
meters. Because its signals can penetrate buildings, the tracking technology can work indoors and
outdoors.
At a Glance: SnapTrack profile
> Main line of business: Develops global positioning system (GPS) software

> Patent holdings: Holds 14 patents on GPS; 36 more patents are pending

> Company turning point: September 1999 Federal Communications Commission decision to
approve SnapTrack's handset-based location technology for wireless 911 services
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