Qualcomm Keeps Ringing It Up>
Qualcomm keeps ringing up stock price hikes | Its wireless
technology wins growing acceptance
The San Diego Union-Tribune
[ Qualcomm ] 's stock price continued to soar,
closing yesterday near a record pre-split high of
$77.75 on below-average volume in the wake of a
recent industry report showing growing
acceptance of the company's wireless phone
technology.
After hovering in the mid-and upper $50 range for most of the last two years,
Qualcomm's stock price began ramping up in January despite an upcoming
high-stakes lawsuit dispute with giant Swedish rival [ L.M. Ericsson ] and
lingering global uncertainty concerning which company's technology will
prevail on future generations of wireless telephones.
Qualcomm announced its initial public offering in December 1991 and began
trading at $16 a share. In February 1994, the stock split at $86. Qualcomm
chief executive Irwin Jacobs said last week that "we're seeing very, very
strong demand across all the business units" for the second quarter.
Merrill Lynch Global Securities analyst Michael Ching credited the recent
run-up to "a combination of little things," including increased handset sales and
wider adoption of code division multiple access or CDMA, the wireless
technology first commercialized by Qualcomm. A Frost & Sullivan report
issued yesterday said global revenue for CDMA infrastructure equipment
topped $8.5 billion last year, "making CDMA the hottest of the three cellular
standards."
Those standards are the older time division multiple access or TDMA and
global system for mobile communications or GSM.
GSM remains the market leader with some 135 million subscribers. But
industry observers and Qualcomm say CDMA is the fastest growing wireless
technology and is gaining ground with about 25 million subscribers. "The most
important point to stress is that CDMA is now a valid, proven and capable
technology," the report stated. "This is significant because, in the past, CDMA
has often been ruled out as a new and unproven standard." But Qualcomm's
fortunes also could be bumped or buffeted this week as the International
Telecommunications Union meets in Brazil to draft a worldwide standard for
wireless phones, now largely divided among several largely incompatible
technologies around the world.
Qualcomm stands to gain substantial ground if the ITU endorses CDMA -- or
a flavor of it -- for future breeds of wireless phones.
Pete Peterson of Volpe Brown Whelan said he has Qualcomm as a "buy."
"People are starting to come around," Peterson said. "We're very positive
about the stock."
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