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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 170.90-1.3%3:59 PM EST
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To: Maurice Winn who wrote (24918)3/25/1999 9:48:00 AM
From: Clarksterh  Read Replies (4) of 152472
 
The infrastructure loss is trivial. The future sales of CDMA is what matters.

I beg to differ. Lest we forget, infrastructure, once it is above some minimum level of sales, has a high margin. It appears that they sold it without even getting any cash. Even money losing business have a cash value. What I have seen so far does not look particularly good to me for at least two reasons:

1) High margins on infrastructure sales are now beyond reach and no cash was obtained in swap.

2) Ericsson benefitted massively from their past tactics. This is hardly going to discourage them from similar tactics in the future, and in the future Qualcomm is not likely to have as strong a hand. If they were tied together in a joint venture this would be a lot less of a problem, but... .

Note that I am not saying that Qualcomm does not get some benefit out of this. (They will get a bigger market into which to sell their remaining wares.) But, they had a strong hand and should have gotten more IMO.

Clark
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