Sell offs to continue? (copy on another Q thread as well)
(thanks to phillips telecon - sorry Go for filling your basket)
Jeff Vayda
Qualcomm To Retain Profitable Haiku
Unit
Opinion By John Sullivan
Last year's market darling, Qualcomm [QCOM] (more), has announced plans to shed yet
another of its business units. The CDMA giant's semiconductor and software business will be
spun off into a new company, currently referred to by the working title of Spinco.
In an age of rampant consolidation, Qualcomm is certainly marching to the beat of a different
drummer. First it spun off its worldwide carrier interests -- also using the name Spinco before
settling on Leap Wireless International [LWIN] (more). Then it sold its infrastructure
business to Ericsson [ERICY] (more) and its handset business to Kyocera [KYO] (more).
All this may leave industry watchers wondering just what's going to be left of Qualcomm when
they're done selling and spinning off things.
Qualcomm has gotten involved in a wide array of sectors, and still has some operations left.
However, highly placed company insiders, who for obvious reasons insisted on total anonymity,
make it clear that Qualcomm is not through slimming itself down.
The company already has gotten rid of most of its core businesses, leaving only an outer ring of
poorly connected peripherals. These include things like the Eudora e-mail program, and the
Omnitracs fleet management product. If Qualcomm is shedding things like the CDMA
infrastructure business, surely its e-mail program is hardly a high priority.
So what will be left of Qualcomm when Chairman Irwin Jacobs' vision is complete?
An FCC bidding credit redeemable at some future wireless spectrum auction, and Jacobs
himself.
Now that Jacobs has succeeded in his lifelong ambition to create a significant CDMA presence
in the wireless marketplace, sources report he plans to shift his career emphasis to a longstanding
ambition, haiku.
Jacobs reportedly discovered the Japanese poetic form while championing CDMA. His first
effort was composed during a long standards group meeting in 1995, at the peak of the CDMA
vs. GSM 'holy war." It perfectly encapsulates the tenor of the CDMA camp at that critical
moment in history:
Code division good
Packets swirling in the wind
Time division bad
Pleased with his initial effort, Jacobs pursued his new interest in haiku, using the form to capture
his thoughts at critical moments during the wireless revolution. Consider, for example, the dark
pain of this piece from January, when Qualcomm's high-flying stock price plummeted from its
remarkable high at the end of 1999:
Bitter New Year's gift
Share price falls like winter rain
I am really pissed
Now, Jacobs plans to make his art the primary focus of Qualcomm's operations, after selling off
all other business functions.
The slimmed down 21st century Qualcomm will essentially consist of Jacobs, who will assume
the title "Creative Director," and a small staff of administrative assistants who will care for
Qualcomm's extensive inventory of rice paper, ink grinding stones and "sumi-e" calligraphy
brushes.
The company will have completed its transition from old-style hardware vendor to a lean,
new-economy concern devoted solely to intellectual property, and achievement of the Zen state
of "satori," or escape from the 10 fetters to spiritual freedom.
As Jacobs wrote in a soon-to-be-released press statement on Qualcomm's reorganization:
Many business groups
Mundane thoughts weigh down my soul
Spin off everything
Some industry players remain skeptical however, and Qualcomm may not have the lucrative
haiku field to itself for long. Ericsson reports it is working on an improved version, to be called
'tanka". The Swedish telecom giant claims "tanka will be backwards compatible with the 5-7-5
syllable system used by haiku, but will add an additional couplet of two seven-syllable lines,
offering customers superior symbolic content and improved thematic richness while offering
greater ease of use."
With this stark warning shot across Qualcomm's bow, watch for a new wireless holy war to
emerge in coming months. |
