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: Gut Trader who wrote (56145)	12/22/1999 8:22:00 PM
From: William Hunt	Read Replies (1) \| Respond to of 152472

Thread ---Qualcomm to sell phone manufacturing unit to Japanese company By Ben Fox ASSOCIATED PRESS December 22, 1999 SAN DIEGO -- Communications company Qualcomm Inc. ended months of speculation Wednesday by announcing it will sell its mobile phone manufacturing unit to Japan's Kyocera Corp. Qualcomm is best known for its cellular phone semiconductor chips that are the industry standard for mobile phone manufacturers worldwide. The sale rids Qualcomm of its least profitable division and lets Kyocera enter the general U.S. consumer cellular phone market, company officials said. The sale, which Qualcomm said it was considering months ago, also allows Qualcomm to focus on its chips and licensing the technology to other companies. As part of the deal, Kyocera agreed to purchase a majority of its code division multiple access chip sets from Qualcomm for five years. "This relationship between our companies establishes a powerful new force in the wireless industry," said Irwin Jacobs, Qualcomm chairman and chief executive officer. Financial terms of the sale were not disclosed. The deal is expected to close by the end of February pending regulatory approval. There are 4,000 workers in the consumer products division, and Kyocera officials said they have not decided how many will keep their jobs. Qualcomm officials said some of those employees will stay on to design phones, but the exact number was unknown. Qualcomm's shares were at $485.43ó, down $11.43ó at 4 p.m. in trading on the Nasdaq Stock Market, though investors had pushed shares up more than $70 in the previous four trading days. Wall Street analysts had speculated for months about who would be the suitor, suggesting such possibilities as Kyocera or Finland's Nokia, both of which have manufacturing operations in the San Diego area, where Qualcomm is based. The production of mobile phone handsets had become a barely profitable business in recent years because of parts shortages and intense competition from industry leaders such as Nokia and U.S.-based Motorola. Qualcomm's margin of profit in the division had shrunk to 2 percent. Qualcomm's consumer products division has produced more than 14 million phones since it began operations in 1995. Its customers include AirTouch, Bell Atlantic Mobile, Spring PCS and U S West, said spokeswoman Christine Trimble. The unit had fiscal 1999 revenues of $1.4 billion, more than one-third of the company's overall $3.9 billion in revenue. Wednesday's announcement caps an eventful year for Qualcomm, which has seen its stock price surge since early spring when it settled a patent dispute with rival communications company Ericsson and sold its wireless equipment operations unit to the Swedish company. So far this year, investors have pushed Qualcomm shares up more than 800 percent. Kyocera, which had sales in fiscal year 1999 of $6.1 billion, produces Yashica cameras and laser printers. It is one of two manufacturers of Iridium satellite phones. The company's president Yasuo Nishiguchi said Kyocera hopes to become one of the world's leaders in mobile phone manufacturing. BEST WISHES BILL