Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Caxton Rhodes who wrote (41864)	9/19/1999 4:19:00 PM
From: Ibexx	Respond to of 152472

Hey Cax, You should've save this post for Ramsey's thread - it'd be most appropriate. <g> Regards, Ibexx

To: Caxton Rhodes who wrote (41864)	9/19/1999 4:19:00 PM
From: Ruffian	Read Replies (4) \| Respond to of 152472

Qho Is Interested In Q Handsets?> Which Player Will Pick Up Handset Division? By Monica Alleven The grandfather of CDMA is folding its cards in the handset business and hoping that its remaining hands in chip sets, licensing, wireless data and satellites will be enough to win the game. Victory won't be easy. Qualcomm says it has talked with several parties interested in buying its handset division, where the first CDMA phones were developed. But even as CDMA technology rages across the land, adding subscribers by the millions, Qualcomm has run up against handset component shortages, competition from bigger players and lower margins. Finding a buyer for its handset division could be difficult, but the company and scores of investors are standing firm behind the company and its high-flying stock, saying it will better compete in its core businesses without the handset unit. The same day Qualcomm announced it was "considering strategic options" for its CDMA handset business, the manufacturer said it expects fiscal fourth-quarter earnings will meet or beat analyst consensus estimates of 87 cents per share. Demand for chip sets and phones has grown, and royalties are rising. Investors warmed to the news of the impending sale of the handset division and the earnings report. Qualcomm's stock was still up early Thursday when the rest of the market was down. Standard & Poor's affirmed its ratings for Qualcomm, citing its settlement earlier this year of patent disputes with Ericsson and July issuance of $1.1 billion in new common stock. Analysts say Motorola, Ericsson, Siemens, Alcatel and lesser known manufacturers in Taiwan are possible takers for the handset division. But prices for CDMA handsets are coming down, and the buyer will have to pay royalties to Qualcomm. "That means Qualcomm will have to cut them a honey of a deal," and take a large charge as a result, says analyst Edward Snyder of Hambrecht and Quist. Snyder sees the Qualcomm luster fading, but not necessarily because the handset division is going away. Qualcomm's core business is selling chips and reaping royalties from other manufacturers that use its technology for CDMA phones. If the price of phones falls, so does the percentage of royalty, and there are indications that the growth in chip set production may be slowing down, which will affect Qualcomm's revenue. More bullish analysts say the company is well-positioned to serve the CDMA chip set market and has proven time and again that it can stay ahead of the development curve. Developments in its wireless data products and applications, the Globalstar satellite network and OmniTRACS vehicle location arenas hold plenty of potential alongside a lucrative chip set business. Qualcomm, for now, may sustain its hot stock without its branded thin phones, but it may have some explaining to do in the human resources department. When Qualcomm sold its infrastructure division to Ericsson earlier this year, some employees were furious the company had not been more forthright about its intentions to sell. When rumors spread last spring that the company would sell its handset unit, officials tried to assuage employees' concerns. Now it looks as though those employees have been dealt a new hand.