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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: JMD who wrote (1612)	7/30/2000 1:23:27 PM
From: idler	Read Replies (2) \| Respond to of 196770

I must say I agree with you. I fail to see the compelling logic behind the spinoff. It seems to me the two major strategic advantages stated are: (1) Spinco will be free to cross-license GSM IPR without compromising Qualcomm's ability to derive royalties from CDMA licensing; and (2) there will be less conflicts with Spinco rather than Qualcomm selling chips to licensees of Qualcomm's CDMA IPR. As to (1), I simply don't see why Qualcomm was not equally free to cross-license GSM technology; whatever arrangements had to be made in existing royalty structures or patent licensing could have been done just as easily through Qualcomm as through Spinco. As to (2), the classic conflict situation was where, say customers of the AT&T division spun-off as Lucent who were also competitors of AT&T were reluctant to buy equipment from Lucent because they were creating profits for their competitor, i.e. AT&T. With Qualcomm, however, customers of the ASIC division were not direct competitors of the Qualcomm licensing-royalty division. There really are no comparable pure licensing companies, except maybe IDC. So I just don't see why spinning off ASICs reduces conflicts. In fact, since Spinco will be 90% owned by Qualcomm and all the Qualcomm top shareholders are also shareholders of Spinco, I don't see why potential customers of Spinco wouldn't regard Qualcomm as basically the same company, from a competitive standpoint. Bottom line, there has to be a reason why Qualcomm is doing this, but it just isn't clear from the S-1 or anything else.

To: JMD who wrote (1612)	7/30/2000 11:26:09 PM
From: w molloy	Respond to of 196770

Hello Mike - I can relate to your viewpoint. One thing you may have overlooked; The sum value of the QCOM business' seems greater than the whole. What if IJ retires soon after the IPO? Just a thought w.