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

To: Uncle Frank who wrote (55229)	12/20/1999 3:14:00 PM
From: Gabriel008	Read Replies (1) \| Respond to of 152472

ALL:from briefing.com this afternoon; Qualcomm (QCOM) 468 1/4 +13 1/4: When all is said and done, Qualcomm management deserves an incredible round of applause. They have turned this company into a powerhouse of the new age, and they seem to be much more proactive about what is yet to come than many companies. While the other mobile handset companies seem focused on developing the WAP standard, QCOM is looking much further ahead and developing HDR technology. Qualcomm's real coupe in the wireless age was CDMA technology. They developed it, then got it accepted, then got Ericsson (ERICY), the principal supporter of the alternate GSM technology, to settle their lawsuit, buy the CDMA infrastructure business, and make a commitment to building out the CDMA infrastructure. And Qualcomm gets a piece of every CDMA system sold, as a royalty. Now Qualcomm is planning, according to a Salomon Smith Barney report issued today (highlighted at 8:22 am on Briefing.com's InPlay page), to sell its handset division. Some would find this puzzling. World demand for handsets outstrips demand right now. Every single handset factory in the world is operating at full capacity, and the backlog still accumulates. On the other hand, it is a highly competitive business with a lot lower operating margins than a royalty stream. Qualcomm will get an extremely attractive price, we think. At Briefing.com, we like technology stocks with high R&D investments (a barrier to entry) that are sold with high demand (new boom areas) and high gross margins. Qualcomm seems to like the same thing as a sale of the handset division gets them out of the lower margin HW business. How Qualcomm will rollout the HDR technology isn't totally clear, but we really love the fact that they are diving into the next era, after having put themselves in the middle of next year's boom through no cost royalty payments. In fact, the only problem with QCOM stock is the price. If you jumped in when the action started, back on March 26 when we, along with others, suddenly realized that the CDMA standard would be adopted in China, and Qualcomm would get royalty payments for the CDMA licensing, you've had an incredible run (QCOM was at $60 on 3/26, after split adj.) At this point, however, QCOM is looking like a disconnected stock. Long term investors might want to hold back for awhile, or dollar cost average in, at this level. The recently announced 4-1 stock split brought a huge crowd of split players into the picture, making it fuzzy. If you have been holding long term, however, stick around. Qualcomm should be a real player in the wireless broadband area next year. - RVG