The Bottom Line on QCOM
Author Benjamin Koppel
Report Source Casey Wian
(Added 6/9/2000 7:38:19 PM)
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The Bottom Line on QCOM
Many people believe that QCOM is still in the cell phone business,
however the company sold this part earlier this year
Now the company designs chips for wireless phones and licenses
this technology to cell phone manufacturers
The main technology this company sells is CDMA technology,
where it is 60m phones with plenty of room for growth
The company receives $10 in royalties for every CDMA phone sold
The stock rose 2600% last year, becoming a "poster child" for tech
stocks, yet it has given back almost 2/3 of that this year
Concerns that led to this are increasing competition from companies
like INTC, who decided to get into the cell-phone chip business,
concerns about patent enforceability, and concerns about
slowdowns in business in China and Korea
This has created a dispute among analysts whether or not the stock
is as low as it will go, or whether it will go down further
Thus, the stock market is having a tough time finding an
appropriate value for the stock
QCOM does have great profit growth going for it, though
In 1996, the company made $21m; in 1999, the company made $201m
In the first quarter of this year, the company made $177m
Further concerns for the company include concerns about the
business in Asia. The company believes that CDMA technology
will take off in China, but some aren't so sure
But the company is anticipating complete wireless Internet usage
on cell phones in about 18 months. Consumers will then be able to
access movies, games, etc. through their cell phones |
