Q thread stuff........
A 3G Coup For Qualcomm
Nov. 14, 2000 may
have lost much of the spotlight to other wireless technology companies this
year, but fresh technology for third-generation services could change that.
Earlier this week, the wireless data giant announced a new wideband-CDMA
multiple access chipset suited for 3G, designed to enhance handset capabilities
and improve quality of service. The MSM5200 single-chip mobile station modem
software, introduced Monday, is part of a package that meets the International
Telecommunication Union's WCDMA standard for 3G services and high-data rate
features.
In addition, Qualcomm's high-data rate technology on Monday was approved as an
industry standard by the ITU. Qualcomm's 2.4 Mbps high-data rate standard -
called CDMA 1xEV - is the first of its kind for 3G and should pave the way to
many royalties for the San Diego, Calif.-based CDMA pioneer, analysts said.
"As far as Qualcomm itself, they're in a very good position. They don't care
what version of CDMA wins right now," said Barney Dewey, wireless analyst from
Andrew Seybold Group. "They're going to get royalties on everything that's built
in the next five years, if not longer."
James Reynolds, who covers Qualcomm for financial institution Ragan MacKenzie,
agreed.
"I think that, increasingly, people believe the third generation of wireless is
a technology rollout that will go until 2010, 2012, and the 3G technology is all
based on the various flavors of CDMA," Reynolds said.
And financially, things aren't quite as shabby as they were a few months ago for
Qualcomm.
After beating fourth quarter estimates last Friday, Qualcomm's stock rose more
than 14 percent to $71.75. In trading before 3 p.m. EST today, its shares were
at $71.44.
"I think the stock was acting well, as the prospects of the company continue to
look bright," Reynolds said.
Qualcomm's decision last month to delay the spin off of its integrated circuits
and systems software, he added, was an important guard measure.
"I think it was sort of a necessary move," Reynolds said. "You had unstable
market conditions, a lot of companies reporting disappointing results, such as
AT&T [T], WorldCom [WCOM] and Sprint [FON], plus shortcomings from networking
stocks, such as Lucent [LU], plus Verizon Wireless [VZ] pulled their IPO."
Dewey gives a thumbs-up to Qualcomm's spin-off plan. "I think their long-term
view is to get out of most other businesses, anything that will become a
commodity," he said. "I think it's brilliant." |
