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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 174.15

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To: SKIP PAUL who wrote (25403)	3/28/1999 5:01:00 PM
From: Clarksterh	Read Replies (3) of 152472

Why would ERICY spend money on developing WCDMA when it is going to end up costing them the same in royalties as CDMA2000? They cannot push CDMAOne now. By their own admission they aren't going to have phones until next year and it is a virtual certainty that their first model will have big problems. They are undoubtedly aware of this. The same is true of infrastructure. Will they actually spend money developing W-CDMA? Sure, it is a good investment if it can convince Europe to hold off on CDMA until they are ready to compete. As far as CDMAone is concerned Ericy is reportedly investing a billion dollars in CDMAone and hiring over 1000 experts in the technology. They have every incentive to maximize a return on investment. Look at it from Ericsson's point of view. They got a lot for their money. They get the IPR which they probably knew they had to have. They get some expertise in CDMA which is somewhat applicable to W-CDMA. And in two years or so they are able to compete in CDMAOne and its derivative. But in the near term the story is different. What can they do to help in the near term? Companies buy other companies all the time just to shut them down or muddy the water. Microsoft is a huge employer of this method of competition. For instance with Java they bought into it and paid licenses largely to sabatoge it. And it would have probably been a good investment, although rather unethical, if they had been allowed to get away with it. Clark PS It is somewhat curious that people think that Ericsson is now on the side of the angels. They are still almost the same company they were a year ago. Very sneaky then, very sneaky now.

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