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Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (17732)	5/7/2000 9:46:00 PM
From: Dealer	Respond to of 35685

QCOM--The Future Is Data (Forbes) By Eric Nee The most important new market for Qualcomm is weaving together the Internet and wireless worlds--a challenge that takes Jacobs back to his Internet roots. Though he's not the type to get giddy about anything, the CEO's cadence does pick up a bit when he describes the possibilities of bringing wireless voice and data together. "The excitement is the Internet," says Jacobs. "The phone you carry in your pocket will be as much of a computer as most anyone needs." Soon, he predicts, cell phones will handle simple tasks like getting news, weather reports, and e-mail on the road. Eventually people will use them for more exotic purposes like locating the closest gas station, downloading music, and buying and selling stocks. The primary obstacle to progress, Jacobs says, is that today's wireless systems were designed for voice communication, not data. They can handle data at a much lower speed than people have become accustomed to on their PCs. Today's CDMA phones offer only 14.4 kilobits per second, vs. 56 kilobits for a standard dial-up modem--itself pathetically slow compared with the broadband cable and DSL modems that are gaining popularity among users. Cell phones are starting to speed up. Japan recently introduced a generation of CDMA phones that offer up to 64 kilobits per second. To help wireless networks gain still more speed, Qualcomm has a technology called HDR (high data rate), which offers a fast 2.4 megabits per second. "We can actually do full-motion video with HDR," says Jeff Jacobs, another son of the CEO's and the senior vice president of business development. (The Jacobs' other two sons, Hal and Gary, do not work at Qualcomm.) HDR has the support of Ericsson, Lucent, Hitachi, and others. It can work in existing CDMA networks but does require cellular companies to add costly equipment at each cell site. Nokia and Motorola have a rival solution they call 1XTREME. The differences between it and HDR are too technical to get into--just one more battle in the standards war. Qualcomm has other powerful advantages in the race to provide wireless data: ancillary businesses it can use to flesh out its offerings. The first is Eudora, a popular e-mail program; e-mail is one of the first things consumers want to do with a data-enabled cell phone. Then there's Omnitracs, a satellite-based system that provides position-location and messaging services for long-haul truckers. Qualcomm started the business in 1988, and today there are some 325,000 Omnitracs-outfitted rigs on the highway. The system lets trucking companies integrate information from the trucks into their inventory and accounting systems. Now Qualcomm wants to apply Omnitracs to the auto industry. Company executives won't provide details, except to say they are interested in supplying CDMA chips for this market. It won't be easy for Jacobs to take these and other technologies scattered throughout Qualcomm and meld them into an integrated offering. What was once a small, close-knit startup is now large and somewhat bureaucratic. Only one person reports to Jacobs these days: Richard Sulpizio, president and COO. This frees up Jacobs from the day-to-day headaches but isolates him somewhat. Nor is Qualcomm any longer the big happy family many say it once was. As a minor example, take the doors to the executive suite. Until recently, the area was open to anyone; now employees must be buzzed in. Another example: a lawsuit, now settled, by former employees who were transferred to Ericsson when Qualcomm sold off the equipment division last year. The employees were distressed that Qualcomm didn't vest all their options, depriving many of big financial gains, especially after news of the deal helped trigger last year's fantastic run-up in Qualcomm stock. Oh yes. The stock. That's changed a few things around Qualcomm as well. Jacobs bought a private jet last year. His 3.5% stake makes him worth just under $3 billion. He can't count on staying anonymous much longer. And with fierce competitors like Jacobs and Qualcomm in its midst, nor can my hometown necessarily hang on to its underachieving ways. The next time the World Series comes to (what else) Qualcomm Stadium, the visiting team may discover a Padres squad that is burning to win.