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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Ruffian who wrote (10060)	5/13/2000 10:54:00 PM
From: Randall Knight	Respond to of 13582

Thanks for this one Ruffian. An excellent read, especially for all of those being lead astray by the Teros of the world. It is interesting to note that the page referenced belongs to a company in the UK. Also, the company does consulting for the GSM community as well as the CDG. The founder of the company worked for Vodafone for a long time, I wonder if he still has their ear?

To: Ruffian who wrote (10060)	5/13/2000 11:23:00 PM
From: JohnG	Respond to of 13582

Ruff. Good read. Thanks much---as usual. JohnG

To: Ruffian who wrote (10060)	5/13/2000 11:25:00 PM
From: LBstocks	Respond to of 13582

MOT: More on Prior Change in Sentiment Salomon Smith Barney ~ May 12, 2000 05/12/00 Motorola, Inc. (MOT $91.50,2-M,Tgt $120.00) Alex M. Cena --SUMMARY:--Motorola, Inc.--Telecommunications Equipment * We changed our rating on MOT from 1M to 2M last week * Our EPS ests were reduced from $3.20 & $4.25 to $3.10 & $4.12 in 2000 & 2001, respectively * Change in our sentiment was made due to combo of factors based on series of small group discussions at the co's corp HQ during middle of the week * Factors are: potential margin expansion that may be achieved by end of 2000 in mobile phones, outlook for wrls infra & MOTs potential position in early 3G awards * Our comments should not be viewed as a change in our view of June & Sept qrtrs where we had made no changes to our forecast. * Though we are still confident on MOT's long-term position, we are no longer as confident of 2H00 & 4Q in particular to justify our prior thesis that MOT's valuation can move closer to peers & trade at 45x-50x fwd EPS vs historical avg of about 30x thus the chg in price tgt from $200 to $120 05/12/00 Motorola, Inc. (MOT $91.50,2-M,Tgt $120.00) Alex M. Cena --EARNINGS PER SHARE-------------------------------------------------------- FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year Actual 12/99 EPS $0.28A $0.44A $0.53A $0.82A $2.08A Previous 12/00 EPS $0.59A $0.67E $0.76E $1.07E $3.10E Current 12/00 EPS $0.59A $0.67E $0.76E $1.07E $3.10E Previous 12/01 EPS $N/A $N/A $N/A $N/A $4.12E Current 12/01 EPS $N/A $N/A $N/A $N/A $4.12E Previous 12/02 EPS $N/A $N/A $N/A $N/A $N/A Current 12/02 EPS $N/A $N/A $N/A $N/A $N/A Footnotes: 05/12/00 Motorola, Inc. (MOT $91.50,2-M,Tgt $120.00) Alex M. Cena --FUNDAMENTALS-------------------------------------------------------------- Current Rank........:2M Prior:No Change Price (05/11/00)....:$91.50 P/E Ratio 12/00.....:29.5x Target Price..:$120.00 Prior:No Change P/E Ratio 12/01.....:22.2x Proj.5yr EPS Grth...:0.0% Return on Eqty 99...:7.9% Book Value/Shr(00)..:24.88 LT Debt-to-Capital(a)12.1% Dividend(00)........:$.48 Revenue (00)........:39497.00mil Yield...............:0.5% Shares Outstanding..:755.9mil Convertible.........:No Mkt. Capitalization.:69164.8mil Hedge Clause(s).....: Comments............:(a) Data as of the most recently reported quarter. Comments............: 05/12/00 Motorola, Inc. (MOT $91.50,2-M,Tgt $120.00) --OPINION:------------------------------------------------------------------ We had recently: (1) changed our rating on Motorola from a 1M/BUY to a 2M/Outperform; (2) reduced our earnings estimates from $3.20 and $4.25 in 2000 and 2001 to $3.10 and $4.12, respectively; and (3) our 12 month price target from $200 to $120. These changes were made due to the total combination of a number of factors that reduced our level of confidence on both our previous estimates and our thesis that Motorola's valuation could rise from its historical average of approximately 30 times forward earnings to 45 to 50 times forward earnings, which would be a much narrower gap with companies that have been not only able to demonstrate market share leadership, but also a defensible franchise and more importantly consistent financial performance. Thus, we believe Motorola is more likely to continue to trade at its historical price to earnings ratio of 30 times forward earnings or about $120 per share within 12 months. While we remain positive on Motorola's long-term outlook and position within the dynamic wireless equipment marketplace, our optimism based on a half days worth of meetings at corporate headquarters during the middle of last week is no longer at the same level as it was prior to those discussions. There was no single issue or smoking gun that changed our view though the change was insufficient to move all the way to 3M/Neutral. It was a combination of three factors: 1) The handset story is a bet on Motorola's suppliers' ability to execute on delivering and ramping new capacity in addition to a bet on Motorola. One bet is plenty, both is difficult. Motorola has an aggressive roll out of new mobile phones this year. In fact, we believe Motorola is probably the only mobile phone supplier that has a chance in competiting effectively against Nokia across all geographic regions as well as all technologies. However, Nokia has locked up most of the existing component capacity for the remainder of the year since Nokia did enter the year with a more aggressive and a more likely forecast for mobile phone growth. Component availability should ease during the second half of the year based on contractual arrangements Motorola already has made with its suppliers, but this availability is based primarily on new capacity that must be functional by the middle of this summer. 2) The 3G story as a whole remains upbeat, but the early wins may prove to be more challenging than we had anticipated. There is some debate on the semantics, but we have confirmed that Motorola already has been informed that BT has selected another vendor, Nortel, for their 3rd generation wireless network despite having recently selected Motorola for their GPRS (a 2.5G technology) upgrade in addition to also using Motorola for their TACs, GSM and Tetra networks. While Motorola is attempting to salvage the relationship, we believe it may prove elusive given the reasons for the loss. The reasons are: (a) price, which is not surprising given that everyone is usually very aggressive when it comes to new networks; (b) Motorola's architectural vision based on IP, while excellent, was not the choice for BT, which would prefer ATM for time to market reasons; and (c) Motorola still does not have an operational trial and has not yet proven it can tie its access radios with Cisco's IP network. Given the size of the opportunity in 3G and even at BT itself, Motorola will eventually win some contracts but not in the time frame we had anticipated. Motorola plans to announce 3G trials with carriers in the second half of this year. However, the trials have to be operational for a sufficient period in order for a customer to be able to properly make an evaluation of its performance and capabilities. 3) Infrastructure growth is in part dependent on CDMA moving forward in China. This is certainly a possibility but other potential beneficiaries of this trend are less optimistic that 2000 is the year for CDMA in that region despite the operators desire to move forward.