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 : QUALCOMM-The Wireless Wonder in 1999 -- Ignore unavailable to you. Want to Upgrade?

To: GO*QCOM who wrote (245)	5/12/2000 8:50:00 AM
From: GO*QCOM	Read Replies (2) \| Respond to of 343

UPDATE 2-DDI unveils strategy for next cell phone battle (Adds comments from DDI president in paras 4, 10) By Yvonne Chang TOKYO, May 12 (Reuters) - Long-distance carrier DDI Corp on Friday unveiled its strategy for the next big battle in Japan's mobile phone market. It plans to use cdma2000, a format promoted by U.S. wireless telephone giant Qualcomm Inc (NasdaqNM:QCOM - news), for third-generation cell phones, to be launched by September 2002. This format will keep down DDI's costs by fitting in with existing infrastructure and technology used by its current cdmaOne mobile phones, also developed by Qualcomm. ``We believe we can stay competitive by taking advantage of the technology and business knowledge we have acquired with cdmaOne,'' DDI President Yusai Okuyama said at a briefing. DDI's main competitors, NTT Docomo and Japan Telecom's cellular phone arm J-Phone, plan to use the W-CDMA (Wideband Code Division Multiple Access) format, promoted by Docomo and supported by European carriers. ``The difference in format doesn't affect users in terms of product performance, so the question is how to keep investment costs low,'' said Yasumasa Goda, an analyst at Merrill Lynch. Okuyama declined to say how much DDI would save in investment costs by opting for cdma2000, but analysts said the company would likely spend much less than the estimated one trillion yen ($9.23 billion) it would have had to find if it had chosen W-CDMA. SLOW START WON'T PUT DDI AT DISADVANTAGE There is no question that W-CDMA will be a de facto industry standard in Japan for the next few years given Docomo's dominance in the cell phone market and its aggressive moves to promote the format globally, analysts said. DDI plans to launch the third-generation cellphones within two years while Docomo, with a local market share of 60 percent, aims to do so in May 2001. J-Phone plans a launch in autumn 2001. But DDI's Okuyama remained confident that its product line of cdmaOne and new cdma2000 phones would be competitive enough to respond to the needs of subscribers, as demand for the fast but costly next-generation phones is still unclear. Analysts echoed Okuyama's remarks, saying that by using less expensive technology, DDI will have a better chance to compete with the telecom giant, given the short life span of high-tech products in the fast-moving telecoms industry. ``The companies will have to come up with even faster mobile phones with larger capacity in the next five years. I think it's wise for DDI to keep costs low for the third-generation phones and seek to counter Docomo and J-Phone with the next version,'' said Toshiaki Iba, an analyst at Tokyo Mitsubishi Securities. DDI shares ended Friday trade up 6.93 percent at 1.08 million yen amid a broad-based rally of Tokyo stocks following a rebound in U.S. shares overnight. MERGER TO HELP DDI Analysts see DDI, squeezed by slack sales in its cell phone business last business year, having robust growth this year as mobile phone services improve ahead of a three-way merger. DDI has agreed to merge in October with KDD Corp , Japan's former international phone service monopoly, and unlisted IDO Corp, a cell phone unit of Toyota Motor Corp , making it the nation's second-largest telecom carrier after Nippon Telegraph and Telephone Corp (NTT) . Analysts said the merger will help the three cover weaknesses, giving DDI fibre optic cable assets, Internet technology and a solid corporate customer base from KDD, as well as financial support from Toyota. DDI is expected to post group operating profit of 102.6 billion yen in the year to next March 31, up from an estimated 23 billion for the year just ended, according to First Call/Thomson Financial's consensus estimate of 13 analysts. DDI AND PARTNER TO CLEAN BOOKS BEFORE MERGER For the business year just ended, analysts expect DDI to be in the red for the first time in three years on a net basis as it prepares for the merger. DDI predicted a net loss of 15 billion yen due to slack sales of its cell phone services and 10 billion yen in special losses incurred by quitting Iridium's satellite phone business. It will also book a 26 billion yen loss from dismantling facilities for analogue cellular phone services. Its partner KDD, also tidying up its books, is seen posting special losses of some 56 billion yen from disposing of communications equipment and to cover a shortfall in pension reserves. DDI will announce its earnings results for 1999/00 on Monday. Japan Telecom, meanwhile, is expected to enjoy steady growth this business year with analysts citing the strength of its mobile phone arm J-Phone contributing to group profit. Japan Telecom, in which British Telecom Co (quote from Yahoo! UK & Ireland: BT.L) and AT&T Corp (NYSE:T - news) each own 15 percent, expects a group net profit of 15 billion yen for 1999/00. The company will announce its earnings for 1999/00 next Thursday. ($1 equals 108.30 Yen)