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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (125884)	12/6/2002 7:25:33 AM
From: straight life	Read Replies (1) \| Respond to of 152472

UPDATE - TCL cuts Wavecom orders, boosts Qualcomm, ADI Friday December 6, 4:29 am ET (In honor of Jon: orders fall at Wavecom so-- sell QCOM!! ...especially since orders for QCOM chipsets will rise, so sell!) HONG KONG, Dec 6 (Reuters) - TCL International Holdings Ltd (HKSE:1070.HK - News), one of China's top mobile phone makers, said on Friday it has cut its orders from component supplier Wavecom SA (NasdaqNM:WVCM - News), but offset that by increasing orders to two other suppliers in a bid to lower costs. Word of the drop in orders from Wavecom sent TCL shares plunging as much as nine percent early in the day on fears that it signaled a business slowdown in China, analysts said. The stock clawed back some of the losses later in the day but still ended down 5.15 percent at HK$2.30. "The (TCL) share price coming down was due to Wavecom saying that their fourth-quarter revenue will drop...mainly due to the cancellation of orders from TCL," said BNP Paribas Peregrine analyst Gideon Lo. "The market may think that sales will slow down in the fourth quarter at TCL." But TCL said the reduction in orders from Wavecom merely represented a shift in buying patterns. The decision to purchase more from Qualcomm Corp (NasdaqNM:QCOM - News) and Analog Devices Inc (NYSE:ADI - News) is part of a strategy to buy more chipsets from those two companies and fewer modules from Wavecom, a TCL spokeswoman said. She declined to discuss exact figures for the orders, but said the company also plans to purchase chipsets from Ericsson (Stockholm:ERICb.ST - News) and Motorola (NYSE:MOT - News) in the future, and that TCL's overall purchasing hasn't changed. Chipsets are one of the main components of a finished module. TCL has previously said it hopes to boost margins by buying more chipsets and using them to produce its own modules and buying less finished modules from outside vendors. The TCL spokeswoman called the cutback in orders from Wavecom a "commercial decision," and denied speculation by Wavecom that the move was due to "an apparent build-up of handset inventories within distribution channels in China." Lo of BNP Peregrine said that based on his discussions with manufacturers and distributors in China, fourth-quarter demand for handsets in the country is still good and there does not appear to be an inventory problem. He said TCL appears to be trying to lower its costs to remain a leading player in the increasingly competitive China market. The TCL spokeswoman said the company still expects to meet its 2003 output target of about nine million mobile phone handsets, nearly double the five million it expects to produce this year. "Of course you can't expect the handset market to keep growing like in 2001 and 2002. but we are still very optimistic about China's handset market," she said. Through Thursday's close TCL shares had gained 10.2 percent in the last three months and nearly 70 percent in the last year. biz.yahoo.com