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

To: Sawtooth who wrote (4681)	12/31/1999 1:09:00 AM
From: phatbstrd	Read Replies (1) \| Respond to of 13582

Would someone care to comment?? SOME STATIC? There are some other niggling factors that could hinder Qualcomm ascending the CDMA throne. For starters, technology is an ever-changing field where flavor-of-the-month companies and technologies burn bright and then flame out. CDMA is a strong contender for the worldwide third-generation mode, but it is not yet guaranteed. And despite Mr. Piecyk's belief that Nokia and Ericsson will be buying chips, they have also been designing mobile phones and wireless networks that bypass many of Qualcomm's patents. A Nokia executive recently stated that because 100 other companies have third-generation wireless patents, Qualcomm doesn't have any more or fewer patent rights than others.

To: Sawtooth who wrote (4681)	1/2/2000 2:20:00 AM
From: Jon Koplik	Read Replies (1) \| Respond to of 13582

To all - the 2/4/99 Red Herring piece is much more interesting (I think). (Note the part I put in bold print). ************************************ Qualcomm still hunting for bulls By Peter D. Henig Red Herring Online February 4, 1999 If ever there was a stock caught in a brawl between bears and bulls, it's got to be Qualcomm (QCOM). Despite monster revenue growth throughout the 1990s, reaching $3.3 billion by the end of 1998, investors have remained unconvinced that the company's moves into the wireless infrastructure market and the highly competitive handset business merit the hot premiums granted to firms like Nokia (NOK.A). In an effort to lure bulls back to its corner, Qualcomm CFO Tony Thornley pitched a roomful of institutional investors at the 1999 NationsBanc Montgomery Securities Conference on the company's vision for "building the wireless future." The bulls snorted. GLOBAL ACCESS Qualcomm, a pioneer in the development of wireless CDMA technology, expects that growth in the wireless industry will remain hot for the foreseeable future, particularly in international markets such as Japan and Brazil. Mr. Thornley said that CDMA subscribers in Japan should jump from 400,000 in 1998 to 3 million in 1999, that there are "tremendous growth opportunities in Brazil and China," and that despite proceeding cautiously in Eastern Europe, it soon expects deployment of CDMA technology in Russia. Such rosy growth projections were only enhanced by Mr. Thornley's other bullish comments. He called Qualcomm's Omnitracs System, a satellite-based transportation monitoring system with over 80 percent market share and over 1 billion transactions per year, "very profitable." He assured the audience that Qualcomm's affiliated businesses with Globalstar (GSTRF), a low-earth-orbit (LEO) satellite communications system that is close to full launch, is very strong. "That's the frustrating thing," said one trader and Qualcomm investor attending the Montgomery Tech conference. "If business is so good, then why has the stock stayed so flat?" The stock has actually dipped below flat. Despite revenues that appear to be doubling every two years, current share prices are actually trading below 1997 highs of almost $70. FIFTH WHEEL "Why is a company that's growing at 30 percent not getting any respect?" asks another Montgomery conference attendee. Good question, but Wall Street has no shortage of answers. Analysts have questioned whether Qualcomm's handset business can compete with the likes of cell phone giants Motorola (MOT) and Nokia, even though short-term demand remains strong throughout the industry. Qualcomm watchers also question whether the company's decision to enter the communications equipment infrastructure business was a wise one. The infrastructure business, which is capital-intensive, would need to generate $800 million in sales to be profitable, says new CEO Richard Sulpizio, although to date it has yet to generate even half of that. For these reasons, Qualcomm recently announced a workforce reduction of 700 employees, and rumors have been churning that the company may even be shopping around to sell its infrastructure business. NEW TOYS ON THE WAY While Mr. Thornley admitted Qualcomm's earnings per share still remain lower than management would have hoped, the CFO highlighted some of the company's new products and services in an attempt to draw the bulls out of a snoozing audience. Mr. Thornley tried to generate excitement by discussing Qualcomm's smart phone that will integrate PalmPilot and CDMA technology into one slim package, to be unveiled in March 1999, and Digital Cinema, an upcoming strategy to transmit movies via satellite. But with a forecasted 1999 price-to-sales ratio trading at just slightly more than 1, and a forward price-to-earnings ratio for 1999 of approximately 23 times estimated earnings, Qualcomm's metrics remain near the bottom of the list for its industry. As a result, either investors are missing the value opportunity of their lifetime, or the doubts concerning future competition in handsets and the drag on earnings by Qualcomm's infrastructure business are continuing to keep the bulls at bay. COPYRIGHT ¸ 1999 RED HERRING COMMUNICATIONS. ALL RIGHTS RESERVED.