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: gdichaz who wrote (6072)	2/1/2000 5:44:00 PM
From: Ruffian	Read Replies (1) \| Respond to of 13582

Qualcomm Deal Opens China to Its Technology By Michael Fitzpatrick LOS ANGELES, (Reuters) - High-flying mobile phone technology company Qualcomm Inc.(NasdaqNM:QCOM - news) said on Tuesday it signed a deal to open up China's giant market to its CDMA technology, the base of new, high-capacity wireless networks. The stock of San Diego-based Qualcomm jumped 9-1/16 to 136-1/16 on Nasdaq after news that it signed a deal with China United Telecommunications Corp., China's second-biggest state-owned telecommunications company. The accord provides for the licensing of Qualcomm's intellectual property for the manufacture and sale of code division multiple access (CDMA) wireless equipment by Chinese manufacturers. The financial terms have not been disclosed. ''This finally opens up the possibility of very widespread deployment of CDMA technology in China, so we're very excited,'' Qualcomm Chairman Dr. Irwin Jacobs told Reuters in an interview. Jacobs noted that wireless penetration among China's 1.2 billion people was still low, at around 3 percent. The rise in Qualcomm stock followed a gain of 16-7/16, nearly 15 percent, on Monday amid anticipation of a deal. Qualcomm was one of Wall Street's best-performing stocks last year. It closed at a record high of 179-5/16 on Jan. 3, then slid during the rest of the month. The installation of CDMA equipment in China Unicom's wireless network is expected to begin promptly, Qualcomm said. Qualcomm said it expected to start rolling out the technology in earnest in China next year. ''2001 is where we will start to see a volume roll-out,'' Qualcomm President Richard Sulpizio told a Banc of America Securities conference in San Francisco. Qualcomm expects to begin shipping initial quantities of chips for handsets and infrastructure equipment chips this year, spokeswoman Christine Trimble said. Larger, commercial amounts will start next year, she said. ''We expect any significant royalty stream to begin in 2001,'' she said. The deal's impact on Qualcomm would depend on how quickly China Unicom is able to deploy the technology, Jacobs said, adding that he expected it eventually to have a major impact. ''They do have plans to have 10 million or so subscribers by the end of the year, which is a really ambitious plan,'' Jacobs said. He said the deal would ''have a major impact for Qualcomm both on the royalty income side and also on our ASICS (chip) side.'' Qualcomm both licenses technology and supplies chips for handsets and infrastructure equipment chips. Still, Analysts cautioned that it was too early to tell how big an impact the deal might have on Qualcomm. ''Obviously China is an enormous potential market for wireless technology. Certainly Qualcomm would be one of he prime beneficiaries of China using more wireless technology in the future,'' said Mark Cavallone, an analyst with the S&P Equity Group. ''It's a good move and a nice deal for Qualcomm, but I don't know if there's an immediate benefit,'' Cavallone said. Qualcomm developed CDMA technology, which is widely used in the United States, and holds many patents on the technology. CDMA, which takes information contained in a signal and spreads it over a wide bandwidth, will allow telecommunications operators in China to carry more phone traffic than the current European global system for mobile communications (GSM) wireless technology. China Unicom has sought for almost a year to roll out CDMA networks to boost its market share against state giant China Telecom. China Telecom, which uses the European GSM standard, currently claims 90 percent of the country's whopping 40 million mobile phone subscribers. ''China Telecom will be a very strong competitor,'' Jacobs said. China Unicom officials hope CDMA, which makes more efficient use of the airwaves than GSM, will give it a competitive edge against its larger rival. ''This agreement enables China Unicom to move forward aggressively with plans to deploy a commercial CDMA network with an initial capacity of 10 million subscribers this year, and exponentially grow the network in the next few years,'' China Unicom Chairman Yang Xianzu said in a statement. Jacobs also said he saw large potential for growth in the wireless Internet market. ''Clearly the whole Internet era is coming (in China) ... there will be room for large growth,'' he said. ''We see that as a good business.'' Printer-friendly format Earlier Stories