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

To: LBstocks who wrote (3606)	11/25/1999 12:28:00 PM
From: JGoren	Respond to of 13582

NextWave press release on 2nd Circuit remand, nothing new: nextwavetel.com

To: LBstocks who wrote (3606)	11/25/1999 1:51:00 PM
From: John Biddle	Read Replies (1) \| Respond to of 13582

I'm going out on a limb here and disagreeing with the SSB report you just reposted. Basically, its thesis is that since the purchase by either MOT or NOKA is accretive to their earnings in a big way, one of them will buy it. They also say that Q will sell it cheap in order to get a good, long term ASIC deal. And, lastly they mention that both companies would benefit in another way from owning it, NOKA to get up to speed on CDMA handsets and MOT to prevent encroachment by Asian mfgs. If NOKA and MOT can make such a high margin on Q's factory, why can't they also do it with one of their own. Surely either of them, being much more successful manufacturers of handsets, could build a factory at least as efficient an Q's and probably more so. While it's true that NOKA has fallen behind in CDMA, it's mostly, if not completely, due to trying to use their own, inferior, ASICs. MOT as well. Seems a lot cheaper and easier to just start buying them from Q, which SSB would have them do anyway. One doesn't need to buy a cow to get milk. Q is a good bargainer, and even better, an astute valuer of their posessions. If, as SSB says, the division is accretive at prices up to $5 Billion, why on Earth would they sell at under $750 million? SSB says it will get them a long term commitment on ASICs. So what! NOKA will eventually have to capitulate and buy good ASICs soon, or lose out on the biggest handset opportunity ever seen. Not likely. They may go to an ASIC competitor, but if they do, Q gets royalties on the chips and an increase in the phone royalties because they're not buying from Q or using their own. Qualcomm is in a very powerful position here because they win no matter how it comes out. That's why the low ball price makes no sense to me. I think SSB wants Q to sell to MOT or NOKA because the market would love it and Q stock would go up another hundred. But I think it will go up much more, though over a longer period, if they sell to a Japanese or Taiwanese company big enough to become a major player, or better yet, to a Chinese company. Q could be using the competition to raise the stakes for the Chinese, who hopefully will see that they need to get in now, and forget the royalty issue. Overall cost is all that matters, and CDMA is what is going to deliver that to them. They may not get a chance like this again. The world is going CDMA with them or without them, and I think they realize that.