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

To: Art Bechhoefer who wrote (48404)	11/3/2005 10:03:11 PM
From: 100cfm	Read Replies (3) \| Respond to of 196444

SAN FRANCISCO, Nov 3 (Reuters) - Broadcom Corp. (BRCM.O: Quote, Profile, Research) Chief Executive Scott McGregor said on Thursday that Qualcomm Inc's (QCOM.O: Quote, Profile, Research) discussion of discounts in a call with investors showed the company's pricing practices were unfair. Chip maker Broadcom and five other companies last week asked the European Commission to investigate their claims that Qualcomm, which sells technology licenses and chips for mobile phones, was stifling competition by giving its chip customers preferential rates for technology licenses. "Yesterday they admitted they used discriminatory pricing," Broadcom CEO Scott McGregor said at the Reuters Semiconductor Summit, held in San Francisco. Qualcomm has denied any illegal pricing. McGregor pointed specifically to comments from Qualcomm's President Steve Altman in a quarterly earnings conference call on Wednesday. "We have provided a small discount for using our chips to companies currently selling W-CDMA handsets in Europe, which we believe to be nothing more than legitimate and lawful price" competition, Altman said, according to a StreetEvents transcript of the call. McGregor, whose company is also suing Qualcomm in the United States, acknowledged that technology companies often charge different prices to different business customers. But he said Qualcomm, which owns key patents for a high-speed wireless standard known as W-CDMA, made certain commitments by making its patents part of the standard. "When you become part of a standard you make a commitment to price on fair, reasonable and non-discriminatory terms," McGregor said. A representative for Qualcomm, which has said the complaints were without merit, declined to comment further. If the European Commission, which received the complaints last week, chooses to launch an investigation it could take years to finish, McGregor and Altman said. WIRELESS GROWTH Broadcom, which makes chips for communications and digital entertainment devices, expects to start reporting small amounts of revenue for its own chips for high-speed wireless phones in the first quarter next year. In the third quarter, about 27 percent of Broadcom's revenue came from wireless, which was its fastest growing division in the quarter. Much of this growth came from Bluetooth, a technology that wirelessly links electronic devices such as phones and headsets to each other. McGregor sees Bluetooth as a key growth driver as it is put in more phones and other consumer products. "We see Bluetooth continuing to grow," said McGregor who believes the market for Bluetooth could "double to triple from where it is now." Part of Broadcom's Bluetooth technology come from an acquisition it made a few years ago. McGregor said Broadcom, which buys one to two small companies every quarter, expects to continue this practice. Broadcom also uses its cash to buy back shares. It plans to buy back about two to three percent of its outstanding shares in 2006 to offset an estimated five percent dilution of its stock from stock options being exercised, McGregor said. Broadcom, which has about $1.7 billion in cash, is able to pay for buybacks because of its strong cash flow, which currently adds about $100 million to the company's cash position every quarter, he said.