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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Michael who wrote (2415)	10/16/1999 8:53:00 AM
From: Valueman	Respond to of 13582

Michael--you left out a very important group of bidders--The Japanese!

To: Michael who wrote (2415)	10/17/1999 6:19:00 AM
From: John Biddle	Read Replies (3) \| Respond to of 13582

Below find some feedback on your Top Ten List for Handset division 1)Siemens- Q selling handset to Siemens is an old Q rumor Q gains a strong European CDMA foothold with Siemens. The longevity & persistence of this rumor and details of Siemens executives visiting San Diego do indeed lend credence to this choice. The addition of another European CDMA manufacturer is thought to be excellent. But why? We already have the two biggest. 2)NOKIA- strong dark horse -Nokia does not want anyone else getting Handset division, and gives in like Ericisson. Very low chance. Nokia is already a cheaper mfg. than Q, with much better supplier contacts/contracts, and benefits not at all from Q plant and people. If they want to benefit from Q brains they could easily use Q ASICs and save bigtime. I believe NOKA is too proud/stubborn to work with Q. ERICY was too, once, but they were in trouble; Nokia is not. Interesting point about them not wanting anyone else to get it though. Others may have this fear also, but it's suicide to run a business that way. 3)Microsoft- Bill Gates has changed (first time ever) MSFT corporate mantra from "PC centric" to include wireless devices. Best way to rapidly gain market share here is to buy it. Possible, but unlikely. Microsoft is not a hardware company, there's just too much margin in software. Sure they make mice and joysticks, but those are tiny markets which were entered to push another product. They'll be kept while profitable but aren't strategic (mice were once). Phones will not be strategic either. Will probably be the opposite. One way to fight MS in phones would be for everyone else to avoid WinCE. I believe MS would rather sell them all WinCE than sell phones. 4)Lucent-Lucent has the money and muscle that Q is looking for. LU just got out of a failed JV on consumer products and is unlikely to have the stomach to try again just now. Also, don't they sell chips to phone vendors and might lose this market if they come out with a phone. Their giant size may help them out with vendor relations, but consumers don't know LU much better than they know Q, and marketing would be expensive. If LU had wanted in, they would have bought the whole thing awhile back. 5)AT&T- Since Armstrong is saying "zero" to ATT going CDMA then something must be up, cause Armstrong is full of BS. This one is just stupid. Sorry, no other word for it. AT&T will NOT use CDMA until they go 3G, and maybe not even then. Anything else is just wishful thinking. Since their network is all Analog and TDMA, buying a CDMA phone mfg is nuts. It helps them not at all, every phone they sell helps a competitor, and they hurt relations with their existing phone vendors. 6)Motorola- Q just using MOT to increase "auction fever" Q's relations with MOT are not good, but this could conceivably fix that, and MOT is very big and could push CDMA sales in a big way. As with Nokia, MOT is already a more efficient mfg than Q, so for them, there will have to be something else in addition to make the deal work. For example, I'm sure they'd like to keep that lower-than-everyone-else royalty rate that's up in the air now. Maybe they'll reach an overall package deal that keeps MOT's rate lower than everyone else but not by as much, and gets them to use Q ASICs. And doesn't MOT have good relations in China? Much to like here with the right deal. 7)Alactel- I hope Q does not sell to the French. Why wouldn't Alcatel be as good as Siemens? Do you just not like the French? My guess is though that Alcatel won't be interested. At heart they're not a consumer company. 8) Philips- Q recently pulled license on CDMA from Philips. Doesn't seem like Q, likes these guys. see LU 9) Dell- Would be a sudden and dramatic move by Dell. Q does not gain any immediate acceptance of CDMA. Q more interested in advancing CDMA and Q's IPR of CDMA. I agree that PC manufacturers will soon see that this is a good idea. However, since Dell is the best of them and making by far the most money, and still growing rapidly, they probably won't make the move first. They are just not a visionary company, they're extraordinary manufacturers. Compaq is hurting and is looking for a new broad strategy to re-ignite both their people and the street. IBM's Gerstner told everyone in Geneva last week that the PC was dead. HP would also be a good possibility. I say CPQ is most likely. 10) Ericisson- already in CDMA camp, no need to sell them, very little to gain. They bought infrastructure division reluctantly, and have already had two sales. This would be a way to make another big step into the CDMA market, but the deal has the same negatives as for Nokia. And what about the Far East? Many here will jump on the idea of Japan, where 3G will start, and where they are still sore from their previous decision not to go with the standard. They missed the whole worldwide market for 2G phones. They won't do that again. But why would the worlds premier manufactures of consumer electronics need to buy an expensive to run plant from Q? It gives them a jumpstart on marketshare, CDMA technical expertise, and the relationship with Palm, maybe the best thing Q has in the phone division. Another thought is the Chinese. They could announce the purchase of the division along with an agreement to go WCDMA for 3G (remember their existing GSM). This would need to be timed to coincide with the entry of China into the WTO, so if this scenario plays out it won't be next week. Expanding capacity by building plants in China will employ many, and is a high tech business to further enhance their reputation. May even be enough to overcome their desire for IPR ownership which Q will not give up. Maybe a lower royalty rate for non-export phones for a contract to use Q ASICs. For my money a deal in the far east far exceeds in value anything we're likely to come up with in Europe. The PC manufacturers are the real dark horse here. In any event, there are enough potential excellent deals out there for us to continue to be excited about the future.