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To: Mike Buckley who wrote (53950)	5/3/2003 11:41:12 AM
From: Jim Mullens	Read Replies (3) \| Respond to of 54805

FUD, Mike- good questions which I’ll try to answer. 1. >>” You feel the FUD of GSMA & Gang has been effective. If that's so, it should be fairly easy to arrive at conjecture about how Qualcomm's performance would have been without the competitive FUD. Where would it (the company, not the stock) be today?” And, What are the competitors' advertising campaigns that have been based on falsehood? (In the U. S., it's illegal to falsely advertise.<< Mike, I’m basically referring the performance of the stock, not the company itself. It is possible/ probable (difficult or near impossible to prove) that thru their extensive “lobbying” efforts the GSMA & Gang have managed to win contracts in developing countries or delay decisions on which 3G technology to use. The recent Anatel ruling in Brazil and the recent disclosure of the ETSI document in Europe regarding a prerequisite to EU membership for Eastern European countries be non-deployment of CDMA are examples. investorshub.com "For readers unfamiliar with the acquis communautaire, it is the full body of European laws to which countries wishing to join the EU must comply as part of the membership qualifications. So it looks like ETSI is asking if countries seeking to join the EU should, by one means or another, be persuaded against the deployment of CDMA as a prerequisite to membership. “These questions are tantamount to blackmail,” fumed one CDMA die-hard over the phone from the US. <<<<< In regards to the stock performance, I believe FUDD by both the GSMA Gang and the “analysts” have been very effective in holding Qualcomm share price down. I believe Qualcomm is a very much “misunderstood/ disliked “ stock by the media and the “analyst” communities. Bad press continues today to haunt the company as the investing public has little clue that “all known roads to 3G require some form of CDMA with direct benefits to Qualcomm”. Qualcomm/ CDMA has been a niche player in the 2G mobile wireless with about 14% of the total market which will soon (3- 5 years) expand to a potential of 100% with 3G. The MSM6300 chipset will allow Qualcomm to sell into the GSM/GPRS market this summer. CDMA/WCDMA handset sales today of roughly 100 M /year expanding to 800 M in five years represents a tremendous growth potential that few appear to recognize/ report. Seven of the 13 “analysts” with 5 year growth estimates (Zacks) are reflecting 16% or less (three are 12% and three are showing 3X%). SSB continues to state that Qualcomm is the strongest long term company in wireless as all 3G requires CDMA yet inconceivably reflects a long term growth rate of only 10% (apparently not covered by Zacks). As you and Tom have pointed out, sell side “analyst” research is suspect at best. Regarding Qualcomm’s stock valuation, I recently looked at some First Call research on premiere growth companies and Qualcomm counterparts. FWIW this is a summary and notes- .......$/SH....PE TTM...PEG....GWR RATE..EPS 03...EPS..04 QCOM...$31.06...23.1....1.16...20.0%......$1.40...$1.49 NOK....$16.57...18.8....1.55...12.0%.......0.86....0.97 TXN.....18.78...46.0....2.30...20.0%.........40....0.72 EBAY....93.61...69.2....1.63...42.5%.......1.45....2.04 AMZN....29.11...64.4....2.81...22.9%.......0.45....0.66 Qualcomm should be trading at $90/sh based on EBAY and AMZN. Q's 5 year growth rate has to be over 20% with WCDMA 3G kicking in 2004/05. TXN can not have a growth rate of 20%, nor EBAY at 43%. At NOK's PEG, QCOM should be at $43 today. QCOM has virtually the same price as AMZN with 3X the EPS (w/o QSI). With regard to the GSMA Gang FUDD, some of the actual advertising/PR copy is outright disinformation. An example is the AT&T wireless copy that calls their GPRS upgrade “next generation”. I questioned this via several email exchanges with a very polite AWE IR rep who ultimately admitted the “choice of wording” was inappropriate but it was a “technology” thing and who understands that anyway. I believe the bigger FUDD impact is through the subtle use of their vast superiority in advertising dollars (or threat of withdrawal of such) to influence the journalistic content of the articles. A case in point is the Investors Business Daily which I subscribed to for over 3 years during which time very few if any articles were fair and balanced in discussing Qualcomm/ CDMA as most all reflected the GSM party line. I emailed the IBD on several occasions, one being when they wrote an article slanted toward AWE after Qualcomm congratulated AWE in a PR for choosing WCDMA for their 3G technology. They quoted an AWE spokesperson (Mr. Woo) in saying “WCDMA had nothing to do with Qualcomm”. I pointed out that WCDMA had much to do with Qualcomm as many companies as of that writing had signed royalty bearing licenses with Qualcomm for WCDMA. IBD replied that “it didn’t know who to believe”. IBD did not then have much advertising, but it did carry full page ads for AWE. I shortly dropped my subscription. 2. >>” you mention that you believe Qualcomm has resigned itself to being in a no-win situation. Unless I misunderstand you, you appear to believe that Qualcomm has no sustainable, competitive advantage due to its competitors' FUD campaigns. If that's so, why are you investing in Qualcomm on a long-term basis? “<< Mike, I’m sorry if I left you with that impression and was not clearer in what I said. I believe Qualcomm/ the CDG have resigned themselves to being in a no-win situation in regards to the PR/ FUD/ FUDD battle. They, over time, have realized they just don’t have the resources to effective compete in that arena. I believe they are convinced they will ultimately prevail with their technological competitive advantages and that’s basically all that really matters. They are concerned that their shareholders are being punished by the “market “and believe the stock is undervalued as they have recently taken several steps to come to the aid their shareholders in that regard. They have instituted a share buy-back program and initiated a dividend with DRIP provisions. Additionally, I have observed they have become increasingly more confident in their recent presentations to the financial community although they continue to be on the conservative side in their financial guidance. Yes, I am a frustrated long-term Qualcomm shareholder and continue to believe that Qualcomm will become the Premiere Growth Company of this decade and probably the next. Qualcomm is the enabler of ubiquitous 3G mobile wireless (and anything/everything wireless) . I have been adding Qualcomm over the last several months taking advantage of the “buying opportunities” being presented by the FUD/FUDD. Over the short term, anything can happen, and it could still go lower. Hopefully with Qualcomm’s expertise the WCDMA technology issues are being resolved and WCDMA commercial viability will become a reality within the next 12 to 18 months and the “analyst” and journalistic communities will recognize such even sooner. jim