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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 176.67+1.6%Nov 12 3:59 PM EST
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To: Maurice Winn who wrote (25266)3/26/1999 8:26:00 PM
From: Clarksterh  Read Replies (1) of 152472
 
Maurice - W-CDMA will be stillborn. If anyone can figure out a reason for Ericy to go ahead and produce W-CDMA I'd be interested in knowing why.

I can think of several:

1) Any relative disadvantage that Ericsson can create for their competitor is an advantage for Ericsson. Ericsson is closer to the front of the pack for W-CDMA than they are for CDMA-2000, and they will probably try to keep it that way by keeping Qualcomm away from W-CDMA so that when Qualcomm introduces their first W-CDMA chips they have the same problems as Nokia and Motorola did.

2) It will take a while for Ericsson to get their new CDMAOne operation really firing on all 8 cylinders (probably close to 2 years before they are really rolling). CDMA-2000 will deploy before that and thus before they are ready, so they will try to stall people with the story 'W-CDMA is better. Wait for it.' In two years this incentive for Ericsson to stall should disappear, but in the mean time ... .

It is the very fact that these items were not resolved in the deal that is my biggest concern. I had hoped that they would be, either by the death of W-CDMA or by Qualcomm being formally brought to the W-CDMA table. Neither happened, but offsetting that is royalties which are probably 3 or 4 times what I expected. Hence my neutral rating relative to what I expected on the deal.

Clark
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