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To: stockman_scott who wrote (53463)	7/2/2002 1:39:06 PM
From: Dealer	Read Replies (2) \| Respond to of 65232

QCOM--Reuters Market News Qualcomm Down 6 Percent After Downgrade LOS ANGELES (Reuters) - Shares in wireless technology provider Qualcomm Inc. (NasdaqNM:QCOM - News) were down more than 6 percent on Tuesday after an analyst cut his rating on the stock, citing global difficulties in the adoption of Qualcomm's wireless data and cellular technology. Shares in San Diego-based Qualcomm were down $1.61 at $24.82 in active late morning trade on Nasdaq. The stock was down 7.2 percent earlier at $24.54, down more than 51 percent for the year and trading near lows last reached in May 1999. On Tuesday, W.R. Hambrecht & Co. analyst Peter Friedland cut his rating on Qualcomm to "Market Perform" from "Buy," citing slow subscriber growth in the U.S. and China and excess inventory of next-generation chipsets. Qualcomm makes chips for wireless voice and data based on its own Code Division Multiple Access, or CDMA technology. CDMA is the dominant standard in the U.S. and is gaining ground in China. The company has been banking on the roll-out of networks and phones based on the "1x" version of the CDMA standard, which offers twice the voice capacity of old networks with always-on data connections more than twice as fast as traditional, dial-up telephone modems. Friedland said, however, he did not believe the roll-out of 1x networks would drive people to upgrade their cell phones as much as similar upgrades did in Korea and Japan. A large chunk of Qualcomm's revenue comes from royalties on phones with CDMA chips. Friedland also cited what he said was a backlog of 1x chipsets in inventory, which would mean slower growth in Qualcomm's fiscal fourth quarter, which ends in September. "Therefore, while we continue to believe (Qualcomm) should benefit from the technology migration to CDMA 1x, we believe the market has not yet fully recognized that (the company) is subject to the same growth challenges faced by the entire wireless sector," the analyst said. Friedland's downgrade comes as South Korea's Samsung Electronics Co. (KSE:05930.KS - News), a major manufacturer of CDMA phones, said it might double its investment in handset production in 2002, depending on market conditions.