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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: R.V.M. who wrote (33023)	6/23/1999 6:29:00 PM
From: Cosmo Daisey	Read Replies (1) \| Respond to of 152472

Jill, I'm with you, lets build the share price to $200 rather than sell out. If the principals need money perhaps we could all chip in a little to help out. I couldn't wade through 100 posts so if this has been posted, too bad. I like the part about Q* ugly phones but the stock price sure isn't ugly. cdaiseyPhd@ugly-phone.com Qualcomm looks good as CDMA picks up speed Published on Tuesday, June 22, 1999 TELECOMS YVONNE CHAN San Diego's Qualcomm should be sitting pretty. It recently ended a standards war with Ericsson by selling its infrastructure business to the Swedish company in a deal Qualcomm chief executive Irwin Jacobs said was worth "several hundreds of millions of dollars". In March, mainland officials announced operator China Unicom would adopt the CDMA standard for its new networks, leading industry pundits to speculate Qualcomm would reap about US$500 million from equipment sales More money would stream in through royalties from manufacturers using Qualcomm patented technology, analysts said. Qualcomm vice-president of marketing Jeffrey Belk declined to confirm the $500 million sales figure, but put to rest rumours of its supposed treasure chest of royalties. "The royalties are important to Qualcomm, but it is only 6 per cent of our revenues," he said. A more important - and far bigger - revenue base were products and services such as its CDMA mobile phones, which last year brought in 94 per cent of its $3.3 billion revenue. By selling its infrastructure unit, the company can now focus on its integrated-circuit and handset business. "It became difficult for Qualcomm to reach profitability in the infrastructure business," Mr Belk said. "It was not an important part of our revenue stream." Qualcomm is looking to secure a manufacturing deal that would see mainland companies produce its CDMA handsets. This would help equip the 10 million CDMA subscribers Unicom expects to have by the end of next year. Qualcomm claims to have a 40 per cent share of mobile handsets in the US, but its phones are thin on the ground in Hong Kong. This is largely because there is only one local CDMA network, Hutchison Telecom's Xin Xian Gan, and it has only a small portion of Hong Kong mobile users. Another factor is that Qualcomm's early line of handsets was rather ugly, a major handicap in fashion-conscious Hong Kong. Mr Belk is quick to laud Qualcomm phones for their light weight, good sound quality and economical price. But the black, elongated handsets so popular in the US are ugly ducklings next to Motorola's slickly styled StarTacs and the rainbow range of colours offered by Nokia and Ericsson. Hutchison is more keen to promote the stylish, metallic-finish CDMA handsets by Motorola and Samsung, and the pocket calculator-sized Sony CM-Z200. To its credit, Qualcomm recently has made its handsets available in a variety of colours and has a new line of compact, foldable phones resembling the StarTac. It also will release later this year the pdQ 1900, which combines a handset and a 3Com Palm digital organiser in a phone with a large LCD display. It can be used to send and receive e-mails, store addresses and appointments, and exchange data with a computer. As well, Qualcomm is to start making phones for the Goldstar satellite network which will launch later this year. "It's like Iridium, but it's not, thank goodness," joked Mr Belk, referring to the financially troubled satellite phone company spearheaded by Motorola. Qualcomm's move to make satellite phones is not a signal the company will move away from the CDMA platform, originally a military mobile technology it adapted for civilian networks in the 1980s. The company initially had endured industry attacks for advocating CDMA, but it was vindicated when the standard became widely adopted throughout North America. However, it needed to defend itself again in 1996 when it became embroiled in a standards war with Swedish rival Ericsson. Qualcomm had developed a next-generation technology for high-speed mobile data transmission called CDMA 2000, while Ericsson had built an incompatible, competing technology called wideband CDMA (W-CDMA). To top it off, Ericsson sued Qualcomm for making systems that used Ericsson's patented technology. A two-year row between the companies ended when Ericsson bought Qualcomm's infrastructure business and agreed to make their standards compatible. Hong Kong's frequency spectrum has limited the number of CDMA networks that could be built, according to CDMA advocates, but the standard is headed for the spotlight as SmarTone Communications is undergoing trials of an Ericsson W-CDMA network. Mr Belke said one of Qualcomm's objectives would be to help promote CDMA technology, which it claims has the easiest upgrade path to next-generation mobile networks that will bring high-speed data applications such as the Internet to handsets. "Our business is growing CDMA," Mr Belk said. "We're going to continue to do that." Copyright (c)1999. South China Morning Post Publishers Ltd. All Rights Reserved.