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

To: quidditch who wrote (3360)	11/17/1999 7:40:00 PM
From: quidditch	Read Replies (3) \| Respond to of 13582

Q announces possible acquisitions. In the url reproduced below, there is a further indication that Q is in an acquisition mode, of which we are well aware. What kind of acquisitions? The $300 million investment in the Korean carrier announced this week did not sit all that well with me. I can understand the arguments advanced by some of us: 1)financial support to ensure HDR in Korea hits the ground running; 2) advance CDMA adoption thesis; 3) give something back to the Korean market (there may have other points put forward by one articulate poster--can't recall them). But I find the analogy to Q's support for LWIN and Nextwave in the early days of CDMA to the 1999 support for the Korean carrier to be a little strained. CDMA is not, today, an infant technology in need of commercial carrier deployment; HDR would seem to be a powerful additional application of CDMA to an already sector-leading growth technology. If HDR adoption on its own (i.e., without Q's financial support) by CDMA carriers can not make it on its own, have we oversold ourselves on HDR's prospects? I wouldn't think so, but Q's investment makes one wonder. Was the investment necessary to keep the cows in the corral? Q has stated that it does not want to be in the infrastructure business, the handset business--i.e., the hardware business, save ASICs. So why is it investing in the carrier business, where the gross and operating margins can not possibly approach those in royalty collection (arguably 100%) or ASIC manuf' and sale (45% gross?)? Doesn't management want to approach these margins in other businesses in which it chooses to invest? With $1.6 billion (now $1.3 billion) to invest, I suppose management can spread a little wealth around. But even with the pullback this week (ouch!, except to the midas touch of one ex-poobah), with the stock at 342+, expectations are running high. Management has performed beautifully. I wonder how this investment fits in the master plan. Opinions invited. Now the news: Wednesday November 17, 3:12 pm Eastern Time Qualcomm sees possible acquisitions NEW YORK, Nov 17 (Reuters) - Wireless telephone technology developer Qualcomm Inc. said on Wednesday it may consider acquisitions to broaden its product and technology mix and gain skilled workers. ``We have historically grown internally, but there is the possibility of acquisitions. It is one possibility to gain additional capabilities and talented people,' Qualcomm Chairman Irwin Jacobs said at the Warburg Dillon Read Global Telecom Conference. Jacobs did not comment about the type of companies Qualcomm may acquire or the time-frame of any possible deal. Jacobs also said China's recent accord with the United States that paves the way for China's entry into the World Trade Organization may open opportunities. ``In the past I've been a little discouraging on the China side, but now I'm a little encouraging,' he said. Jacobs said Globalstar, the global satellite telephone company in which Qualcomm owns a six percent stake, should see its business grow substantially next year. Globalstar has launched service with so-called friendly, or non-paying, customers but it is preparing to provide service to paying customers shortly, he said. Steve