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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (65837)	2/2/2000 2:21:00 PM
From: Lynn	Read Replies (2) \| Respond to of 152472

Thread: Merrill Lynch released an updated report on QCOM today titled, "QUALCOMM:Good News for the Long Term." ML maintains it Neutral intermediate and Buy, long term ratings. Here is part of the report: Technical Rating: Investment Highlights: · Yesterday, QUALCOMM announced an agreement with China Unicom that will pave the way for CDMA to be finally deployed in that country. While this is good news for QUALCOMM in the long term, it does not change our view in the intermediate term. · We do not expect CDMA service to be launched in China for several months, so this announcement will likely have a negligible impact on QUALCOMM's fiscal 2000 EPS. Our fiscal 2001 EPS estimate already assumed some modest acceptance of CDMA in China. Fundamental Highlights: · This agreement had been widely anticipated, although it took considerably longer to finalize than expected. · China Unicom expects to build a network with capacity to serve up to 10 million users in 160 cities by the end of 2000, although funding is still an issue. · There may be some upside to our fiscal 2001 estimates if China were to ramp as quickly as some other countries, but we think it's too early to make any changes at this point. [snip] We would not expect the initial phases of the network to be completed until September, so we should not expect to see CDMA service widely available in China until the end of this year. This will not likely help QUALCOMM's fiscal (September) 2000 results, and our near term concerns on earnings growth remain. Furthermore, it is still unclear how China Unicom will fund their network construction and operations. However, our fiscal 2001 models do reflect some modest adoption of CDMA in China (about 5 million users), and we recognize that there may be some upside to that assumption. We saw 2 million CDMA subscribers added in the first 12 months in Japan, 3 million in Korea, and 2.5 million in the U.S. China obviously has a much larger potential subscriber base than these three countries, although it also has a significantly lower GDP per capita. At this point, we believe it is too early to change any of our model assumptions or our EPS estimates. Lynn