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

To: Maurice Winn who wrote (4476)	12/23/1999 7:37:00 AM
From: quidditch	Respond to of 13582

Kyocera, China and other ruminations: Although not in a position to tell exactly what Mq's deep Beijing throat knows, I do know, having just returned from working with an Australian client with rather deep relationships with a powerful quasi governmental entity, that China is bursting inside with pluralistic forces and relationships. That is to say, the official "party" line may seem monolithic, and Wu and MII may seem to be, and may actually be, promoting a rather anti-CDMA line. And that line may come to pass when all comes out in the wash. But monolithic, China is no more. You have only to look at the NYT this morning for a description of internet and web access fever gripping China. There are many forces attempting to capture a bit of that market, and China will--indeed is--disposed to see a bit of that market captured by foreign interests as long as reasonably contained. This pluralistic trend was captured marvelously in a WSJ article this Spring detailing the break-up and deregulation of MII. Belgrade bombing delayed this a bit, but the forces are still in place. The article posted by Brian h (I think) a while ago which contained a poll of Chinese re. whether they thought that CDMA was technically superior to GSM--there were numbers who said they didn't know what CDMA was, but there were also numbers who did know and who had a sense of the advantages. This tends to support the point that Mq is making. None of this goes to "prove" that CDMA will enter China in force, but it does go to the issue that China is much more open than appears on the surface. Deals are struck subtly, behind the scenes, letting the natural gestalt take its course. A Chinese poster on the other thread chided me for opining that maybe Kyocera was good for the China opening because of historic enmity between the two peoples (for good reason, circa 1937 and the atrocities beyond) and then made the more salient point that deals have to work for cultural, business and synergistic reasons. Rolling forces of change are in place for that to happen. Steve

To: Maurice Winn who wrote (4476)	12/23/1999 7:54:00 AM
From: Ron M	Read Replies (1) \| Respond to of 13582

Maurice Winn Dept of Wild Expectations Report from the San Diego Union Tribune; no wild expectations here. 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.