Qualcomm Sees Lower Chipset Orders in Korea in 4th Quarter
Seoul, June 28 (Bloomberg) -- Qualcomm Inc., which developed mobile phone technology used by 57 million people worldwide, said it sees lower sales in the fourth quarter in South Korea, its largest market.
Korea has 27 million mobile phone service subscribers all using handsets that use Qualcomm's code division multiple access technology. Samsung Electronics Co. and LG Information and Communication Co., which dominate the Korean market, pay Qualcomm license fees for its chip sets.
``Based on feedback from South Korean customers and operators, the company may experience lower order levels for its chip sets in the fourth quarter of fiscal 2000 due to an anticipated decrease in domestic South Korean phone sales related to the elimination of phone subsidies,'' Qualcomm said in a statement.
Qualcomm added it does not expect ``these developments in South Korea to affect pro forma earnings in the third quarter of fiscal 2000.''
The company's global depositary receipts fell as much as 5.65 percent to 65.10 euros. They were recently trading at 66.10 euros.
The Korean government banned the country's five phone service providers from offering handset subsidies to attract new subscribers from June 1 in a move that more than doubled the price of handsets for end users.
Ahead of the ban, more than 2 million handsets were ordered, according to local newspapers. Still, local brokerage analysts have lowered their forecasts for annual handset sales for Samsung and LGIC by as much as 50 percent.
Jun/28/2000 6:02 ET
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[Well, as the oft-vilified Snyder would say, "the other shoe has dropped." As a shareholder who staked his belief in managment, this shareholder feels absolutely stunned -- how could Snyder be right and Roberts (Q's shill) be so wrong. Gee, Roberts has the ear of q's managment and he reassured us just a week ago about the Korean subsidy issue.
Q's management now has a long walk up a steep mountain just to regain its credibility.
I guess an optimist would say, "well, q said that chipset sales "may" be impacted, and that it its "only" in korea, etc., etc., . . . but at this stage, optimism has its place at wishing wells and not in the stock market.] |
