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

To: John Biddle who wrote (4459)	12/22/1999 10:21:00 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 13582

It's very clear why QCOM wants to get out of manufacturing handsets for consumers. It's a big hassle, requires all kinds of marketing and distribution, retail outlets, etc., and is fiercely competitive (which means lower margins). QUALCOMM is merely doing the things it does best -- designing and creating new chips, elegant engineering -- ideas rather than finished products. Kyocera is a marvelous company. I would much prefer an alliance with Kyocera than with Sony. Once again, QUALCOMM has made a very intelligent decision to work with a company committed to CDMA, and not to other competing systems, such as GSM. As far as the deal itself goes, Warren Buffett has stated on numerous occasions that the only good deal is one where BOTH parties benefit.

To: John Biddle who wrote (4459)	12/23/1999 2:26:00 AM
From: Clarksterh	Read Replies (2) \| Respond to of 13582

Why Kyocera: They said that it was good for the transition, good for retaining the employees, and allows Q to stay close to the handset market. From a business perspective there are several things I would have wanted from the handset sale. But far, far and away the front-runner would be that I would want a continued inside view into the people using the remaining Q! products (ASICs in this case). Many moons ago I bemoaned the loss of the handset division because I thought that even if it was losing a small amount of money the loss of synergy could be devastating to the ASIC business over the next few years. In addition, it could limit Qualcomm's innovateness in things like handset software, services, etc.. Dr. J miraculously worked around this with the little loan-in, but I'd be willing to bet a lot of money that NOK and MOT (as industry leaders) were unwilling to be so open and were thus ruled out. I view this sale, with that provision + cash + accretiveness, as very good. It's a pity we couldn't get the same deal with NOK, but I view the synergy as more important than the 'political buy-in' associated with Nokia buying the division (Ericsson bought in, but still touts W-CDMA.) Clark