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

To: Eric L who wrote (5598)	12/18/2000 4:14:22 PM
From: straight life	Read Replies (1) \| Respond to of 197344

"QCOM: KOREA AWARDS 3G LICENSES AS EXPECTED – STRONG BUY QUALCOMM, Inc. (QCOM-NASDAQ) Stock Rating: 1 Price Target: $90" First Union Securities Covers QCOM cnetinvestor.com Morning Notes: Visit the CNET Brokerage Center for daily reports from the top Wall Street analysts. QCOM: KOREA AWARDS 3G LICENSES AS EXPECTED – STRONG BUY QUALCOMM, Inc. (QCOM-NASDAQ) Stock Rating: 1 Price Target: $90 KEY POINTS Late last week Korea’s SK Telecom (SK) and Korea Telecom (KT) were awarded new spectrum licenses and announced plans to use W-CDMA technology in the new spectrum. The awards and technology plans have been anticipated for 6 months. We expect a total of three new spectrum licenses to be awarded. Two of the licensees selected W-CDMA technology for the new spectrum. The third licensee is expected to pick CDMA2000 due to the influence of the Korean government. We expect W-CDMA to be the technology choice for 3G networks deployed in new spectrum and CDMA2000 to be the technology choice of 3G networks deployed in existing IS-95 CDMA networks. That is exactly what it happening in the U.S., Korea and elsewhere. No matter the flavor of 3G CDMA deployed, QUALCOMM’s royalties are the same. We believe cdma2000 1X is more beneficial to the company because of expected chipset sales. Separately, last week Cisco announced the acquisition of ExiO Communications, a developer of in-building wireless communications solutions based on CDMA. ExiO is a QUALCOMM licensee. We expect Cisco to become a licensee as well. Because of Cisco’s market power we suspect that Cisco becoming a licensee would be positive for QUALCOMM. We are maintaining our EPS estimates and our Strong Buy rating on the shares. Our price target is based on our conservative CAPM. DETAILS 3G LICENSES IN KOREA Late last week, Korea’s Ministry of Information and Communication (MIC)announced that SK Telecom and Korea Telecom had been selected as licensees for new spectrum licenses to be used for 3G services. As submitted in their license applications, SK and KT are planning to deploy W-CDMA. Applications by LG Telecom and Hanaro were rejected. We expected both companies to revise and re-submit their applications for the third 3G license. LG’s application specified a W-CDMA system; Hanaro’s cdma2000. Earlier this fall various reports in Korea have indicated the MIC would like one of the three licenses to select cdma2000 for the new 3G license. We expect the MIC to choose the third licensee within 60 days or so. Our models and estimates are unchanged by the technology selection announced by the new Korean licensees. Our models currently assume QUALCOMM captures no W-CDMA chipset revenues, which we believe is a very conservative. We believe some investors may have mistakenly interpreted the Korean awards as new information or as unanticipated. We have long believed that winners of new spectrum would deploy W-CDMA and that IS-95 holders of existing spectrum would migrate to cdma2000. QUALCOMM is expected to receive the same royalties on W-CDMA and as on cdma2000. QUALCOMM’s commercialization of a W-CDMA chipset and future design wins could provide upside potential to our current estimates. Both SK Telecom and Korea Telecom are among the most aggressive carriers in deploying CDMA2000 technology. Both carriers are deploying CDMA2000 1x in their existing networks and plan to be offering commercial 3G services widely throughout the country by mid-’01. 3G services over their planned W-CDMA networks in the new spectrum is unlikely to happen until at least the 2 nd half of ’02. CISCO LIKELY TO BECOME QUALCOMM LICENSEE Separately, last week Cisco announced the acquisition of ExiO Communications, a developer of in-building wireless communications solutions based on CDMA. ExiO is a QUALCOMM licensee, and we believe Cisco is already negotiating for a transfer of ExiO’s license with QUALCOMM. Cisco becoming a QUALCOMM licensee and promoting the technology could be positive for QUALCOMM because of Cisco’s market power. We reiterate our Strong Buy because the fundamentals have not changed and because we believe there will continue to be more positive announcements than negative. Additional information is available upon request. First Union Securities, Inc. maintains a market in the common stock of QCOM. An author of this note owns stock in QCOM. QUALCOMM is on the Analyst Action List. This is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments mentioned. Interested parties are advised to contact the entity they deal with, or the entity that has distributed this report to them. The information has been obtained or derived from sources believed by us to be reliable, but we do not represent that it is accurate or complete. Any opinions or estimates contained in this information constitute our judgement as of this date and are subject to change without notice. First Union Securities, Inc. (“FUSI”), or its affiliates may provide advice or may from time to time acquire, hold or sell a position in the securities mentioned herein. FUSI is a subsidiary of First Union Corporation and is a member of the NYSE, NASD and SIPC. Copyright © 2000 First Union Securities, Inc. FUSI is a separate and distinct entity from its affiliated banks and thrifts.SECURITIES: NOT FDIC-INSURED • NOT BANK-GUARANTEED • MAY LOSE VALUE