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

To: foundation who wrote (25423)	8/10/2002 8:52:04 AM
From: John Carragher	Read Replies (1) \| Respond to of 196747

10 tech buys, and 10 tech sells. is cover story for Barrons today. Qcom excerpt Telecom Cut The Cord Let's be blunt. We're worried about the cellular business. The issue is relatively simple. The market for cellular voice traffic is maturing. The cellphone companies think they can stimulate replacement demand with color screens, built-in cameras and other new features. And yet most people use cellphones to make voice calls. We fear current estimates for handset sales for both this year and next year are too high -- and if that's true, the stocks could see another down leg. Merrill's Milunovich says the cell- phone makers are suffering from a condition Harvard tech guru Clay Christensen calls "overshoot," meaning current technology is already more than good enough for most users. In markets where that happens, Milunovich says, profits shift from systems companies, such as Nokia and Motorola, to component companies, such as Qualcomm and Texas Instruments. Montgomery's Rezaee says he'd be a buyer of Qualcomm shares "once the dust settles." The company's CDMA technology has a strong foothold in Korea, Latin America and in the U.S., where Sprint and Verizon have standardized around it. Unlike Motorola or Nokia, Qualcomm does not make phones. Rather, it collects licensing fees from systems using CDMA technology, and it sells chips for CDMA-based phones. With the stock trading for about 23 times expected earnings for the September 2003 fiscal year, though, it seems fully valued. Of the large handset companies, Motorola is having a better time of it for the moment than Nokia. While Motorola has been showing some results from a long restructuring process, its Finnish rival has lost some market share. Motorola is "doing things it should have done years ago," as Rezaee puts it, although it remains to be seen if the company can produce reliable revenue growth. Nokia dominated the phone business in the late 1990s, thanks in part to ineffective competition from Ericsson and Motorola. But competition has heated up. Though not in our top 20, the company gaining the most ground in the wireless phone market at the moment is Samsung. Meanwhile, the sector as a whole could see more disappointments, as the industry's struggling carriers attempt to lure investors to use additional services made possible with so-called 2.5G and 3G services. Neither handset maker looks expensive at the moment -- Nokia trades for 14 times expected 2003 earnings, versus 24 times for Motorola, though Motorola looks cheaper on a revenue basis, at 0.9 times expected 2003 results, about half that of Nokia. And yet we think estimates, and stock prices, face one more down leg. For now, we would not be buyers of any companies in the handset business.

To: foundation who wrote (25423)	8/10/2002 12:46:19 PM
From: Neeka	Respond to of 196747

Vodafone 'delay' to 3G Will consumers want the new mobile phones? Vodafone is to postpone the sale of third generation mobile phones in the UK until next year. The company has said it will not sell any third generation (3G) phones outside of Japan this year because of a shortage of handsets, a report in the Financial Times said. Vodafone had previously been expected to launch 3G services in the UK, Germany and Spain in the second half of this year. Vodafone confirmed that it would not launch third generation mobile phone services in the UK until next year. 'Nothing has changed' But the firm dismissed suggestions that this amounted to a delay, saying that this had always been the company's intention. "Nothing has changed in terms of timing," a Vodafone spokeswoman said. "We are opening 3G this year but will not be promoting it. "We said back in May we would be opening it but not promoting it. It depends on how you define a launch," In the City, the news failed to stem a creeping recovery in Vodafone shares, which closed at 80.5p hit on 3 July. On Friday, the stock closed at 97.75p, 1.25p higher on the day, if well below the 399p level hit two years ago. Technical concerns It is unclear how strong demand for 3G services will be and questions remain as to when - and if - mobile phone companies will reap the hoped-for returns on their investments in the new technology. Technical problems and a shortage of handsets could further hamper telecom companies' ability to make profits from the new services. A report in Germany's Die Welt suggested that Vodafone was unhappy with the technical features of Motorola and Nokia mobile phones. Hutchison Whampoa has said it still plans to trial its services in Britain and Italy this year. "We are definitely still going ahead. We will start our customer trial programme around October, " a spokesman said. "We have signed agreements with Motorola and NEC, so we will have an abundant supply of handsets when we launch." 'Prudence has prevailed' Earlier this week, it emerged that services in Sweden - expected to be one of the first European countries to offer the new services - were likely to be delayed. Orange, one of the four licence holders, has asked for a three-year delay to the schedule. Analysts said operators would rather see 3G come in late rather than prove disappointing. "They can't afford to fail, therefore prudence has prevailed," said John Hayes, fund manager at F&C Management in London. "It's very difficult to blame the operators," Mr Hayes added. "New technologies tend to come in over budget and late." news.bbc.co.uk