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

To: John Carragher who wrote (71218)	4/26/2000 8:41:00 AM
From: JohnG	Respond to of 152472

FRom Rocket. JohnG multexinvestor.com 000426 ### ### FIRST UNION SECURITIES, INC. ### ### QCOM: EUROPE MAY BE OPENING UP TO CDMA ? REITERATE STRONG BUY QUALCOMM, Inc. (QCOM-OTC) Stock Rating: 1 Price Target: $215 PRICE: $152 1/4 April 10, 2000 52-WEEK RANGE: $200-$15 Mark Roberts / (650) 571-7285 DIVIDEND/YIELD: none/nil Mike Whitfield / (312) 574-5147 EPS ESTIMATES (FY 9/30) 1999A 2000E 2001E Q1 - December $0.08 $0.25A $0.32 10-DAY AVERAGE Q2 - March 0.10 0.26 0.28 VOLUME: 12.8MM Q3 - June 0.19 0.26 0.32 Q4 - September 0.25 0.31 0.46 INSIDERS ---- ---- ---- OWN: 8.5% Full-year EPS $0.62* $1.07 $1.37 INSTITUTIONS P/E RATIOS NMF 142.3x 111.1x OWN: 54% Shares Outstanding: 790.8 million EST. 3-5 YEAR EPS Market Capitalization: $120.4 billion GROWTH RATE: 60% * Sum of quarters does not total to year figure because of rounding on 4-for-1 split adjustment KEY POINTS -- The European market may be slowly opening to QUALCOMM. We believe that the EU is going to relent and allow carriers to adopt any of the 3G technologies and not mandate only W-CDMA. -- We believe that ETSI, the EU standard setting body has voted to allow European carriers to adopt any of the proposed ITU 3G technologies. We have not been able to confirm the decision or the terms with ETSI. -- QUALCOMM will probably receive royalties on W-CDMA anyway. However, if carriers in Europe can opt to adopt any of the ITU 3G modes it potentially could open the market for QUALCOMM to also sell chips and accelerate the timing. -- We reiterate our Strong Buy on the shares. DETAILS What has changed. We have multiple reports that ETSI (European Telecommunications Standards Institute) has approved a resolution endorsing all three modes of the ITU?s 3G standard. ETSI had historically endorsed deployment of only W-CDMA in Europe. If we have correct information, there are several implications:-- ETSI has said previously that they would only allow European carriers to use W-CDMA. We believe its position has been an attempt to try to keep U.S. manufacturers out of Europe because Ericsson and Nokia are thought to be ?ahead? in the development and deployment of W-CDMA while QUALCOMM, Lucent and Motorola are thought to be ahead in ?CDMA 1X and 3X? technologies. -- The ITU (International Telecommunications Union) is in the process of adopting a single CDMA standard with three modes: direct sequence (W-CDMA), multi-carrier (1X and 3X) and a TDD (time division duplex) mode. QUALCOMM disproportionately benefits if carriers adopt a bias toward 1X and 3X multi-carrier because it is already developing chips for 1X and 3X (they essentially wrote the multi-carrier part of the standard). -- The U.S. government as well as a few global carriers like Vodafone have been pressuring the EU to adopt the ITU standard so: 1) carriers can have phones that work on networks everywhere in the world and, 2) the U.S. government wants to open European markets to American technology. We suspect that ETSI may issue a press release on its new position within the next few days.