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

To: kech who wrote (6458)	12/14/1997 7:59:00 PM
From: dougjn	Read Replies (1) \| Respond to of 152472

I think WLL will be big, but longer term. So far the contracts are all little demo projects, peanuts from what I've seen. $50mil, $30 mil, etc. (Remember these aren't royalty payments, but equipment revenues w/attendant direct costs.) When we start getting the 200 mil, 500mil contracts to WLL up whole cities, then it'll be big. 99? Please remember all, I'm mega positive about the Q longer term. Just happy to have dodged a bullet here on the Korea thing. Since I think its fifty fifty, up / down from here in current news, I got in 50% when Mr. Market took my low ball bid Friday near close. Hey, it was my best shot, thinking fast at the time. Actually, still pretty happy with it. Now, is Csco a buy here or not??? Doug

To: kech who wrote (6458)	12/14/1997 8:07:00 PM
From: Caxton Rhodes	Respond to of 152472

Who cares about the 29% drop? Spy news: Spying charges may be dropped \| Envoy informs Boxer about Qualcomm case You guys have completely forgotten about our pal Mr. Bliss, we gotta get this guy home for Christmas. The big picture is that Asia economies needed a shakeout and they're getting it. The QCOM plan is unfolding as strategized. Stronger $s, mean cheaper overseas factories to supply WLL which is where the big money is. As long as the first sprinkle of Q WLL systems go off without a hitch, the q is in business. OK, a slower buildout short term, but if you're in this stock because you believe in the superior technology and the strategy of licensing competitors and the inevitable buildout of WLL telcom, life is good. There is lots of potential upward surprises, faster snowballing consensus on the superiority of CDMA over GSM, AT&T making the switch, lots of sales of the Q 9-sector base stations, etc. Buy on dips and drops. Caxton ------------------------------------------------------------------------ Elizabeth Douglass STAFF WRITER \| Reuters news service contributed to this report. 11-Dec-1997 Thursday The Russian ambassador has told at least one U.S. senator that espionage charges against a Qualcomm Inc. technician could be dropped as early as the weekend. Yuli Vorontsov, the Russian ambassador to the United States, was quoted as making the comments to Sen. Barbara Boxer, D-Calif., in a phone call last night. The ambassador has made similar predictions to Sen. Dianne Feinstein and Sen. Richard Bryan, D-Nev., a source said. "Sen. Boxer said that Vorontsov predicted that the problem will be resolved, and that the charges may be dropped as soon as the weekend," said David Sandretti, a spokesman for Boxer. "He was very positive." The other senators could not be reached for comment. If true, the action would put an end to the first spy case involving an American businessman in decades. Richard L. Bliss, a 29-year-old field technician at Qualcomm of San Diego, was detained in southern Russia on Nov. 25. Last week, Russian officials formally charged him with gathering secret information while carrying out surveillance work using satellite equipment. He was released over the weekend, but must stay in Rostov-on-Don while the case progresses. U.S. officials and Qualcomm repeatedly have said that Bliss is not a spy. Last night, Qualcomm said it could not confirm the ambassador's news. "If that were the case, we would be extraordinarily excited," said Dan Pegg, a Qualcomm spokesman. "However, all our efforts will continue on a legal and a political front until we get confirmation." Bliss' family was encouraged but cautious upon hearing the ambassador's reported comments. "That's great if it's true," said Judy Bradley, Bliss' mother. "I did hear something similar a few days ago, but nothing's happened." In a letter, Bradley yesterday asked Russian President Boris Yeltsin to release her son. "My son is being held in your country falsely accused of something he never would have done," Bradley wrote in the letter, which will be forwarded by the Russian Embassy to Yeltsin. "I beg you to give him back to me before Christmas."

To: kech who wrote (6458)	12/14/1997 8:27:00 PM
From: Jim Lurgio	Read Replies (2) \| Respond to of 152472

Tom , I'm happy you made mention of Gregg Powers post on the Frezza forum and since there has been explanations and thoughts by many in this forum I thought it might be in good taste to copy and paste his comments to me from the Frezza forum. Considering the fact that his company is the largest or one of the largest institutional investors his opinion is worth reading. Gregg Powers - 08:48pm Dec 13, 1997 (#715 of 719) Jim....be forewarned that this is a long post to address a complicated question that is non-trivial to analyze. Let's try to cover what is analyzable. With over 4.5mm CDMA subscribers, Korea's growth has provided a tailwind for both QC's royalties and ASIC sales. Assuming an average handset selling price of $600 (from manufacturer to service provider) and roughly 3mm local phones sold (I estimate that approximately 1.5mm QPE phones were sold in toto and that recent sales have been primarily homegrown models based on QC's ASICs), Korean handset revenues would be around $1.8bb. Assuming a 3% average royalty, QC to date has probably earned something around $55mm in royalties from Samsung and LG Electronics (Lucky Goldstar). Recently several new Korean operators have launched CDMA service, and reportedly there are several million people on waiting lists for phones as demand has outstripped production capacity. To this point, little appears to have changed from the standpoint of Korean take-rates-but it is reasonable to assume that if the economic turmoil persists, demand will be impaired at some point. But, keep in mind that when the IMF bailout was signed, it contemplated a reduction in Korean economic growth from 8%-10% to 3%-4%, and an increase in the unemployment rate from 2% to 4%. This may be a dismal performance by Korean standards, but it hardly constitutes a meltdown in economic activity. So, all else being equal, the crisis should not devastate demand. With respect to royalties, we have two issues: what will happen to demand for Korean CDMA handsets (internally consumed and those exported) and how does the decline in the Won impact QC's royalties. Royalties will clearly be adversely impacted. Assuming total Korean production of 5mm phones in 1998, the 50% decline in the Won could potentially reduce royalty-bearing sales revenue (in dollar terms) from $3bb to $1.5 and, therefore, cost QC $30mm in after-tax profits during the course of fiscal 1998--all else being equal. But, of course, all things are not equal. We are assuming that the Won never recovers and that Korean handset prices do not increase in local terms (remember that the QC ASIC, and all other imported components, have doubled in price in conjunction with the decline in the Won). Meanwhile, export volumes could potentially increase if the Won remains weak and effectively lowers the selling price to some (but not all) foreign customers. Lower selling prices on exported Korean handsets could actually help spur the conversion from analog to digital in the U.S. (where many 800MHZ carriers have been struggled with the price differential between analog and digital phones). So-QC could potentially have lower handset royalties but increased ASIC sales (and it will take someone smarter than me to sort all this out). Meanwhile, while we are all focusing on Korea, it is easy forget that CDMA networks are now running in over thirty countries and that Japan will come up commercially during the first half of 1998. Also, U.S. PCS is now in full swing as Sprint and PrimeCo move out of the deployment stage into pure commercial operation. The latter is a particularly important point because the expanding availability of digital PCS is forcing a more rapid migration to digital by the 800MHZ cellular operators (who, almost without exception, have accelerated their digital rollouts and are now aggressively selling digital). So, in the big picture, I could rhetorically ask what is more important: 600mm pops in the U.S. and Japan or 45mm pops in Korea? Still, Wall Street gets paid to trade stocks and technology investors tend to be trigger happy during the best of times. Despite challenges in Korea, I still think that QC will generate something around $3.5bb in revenue and earn somewhere between $170mm and $180mm in Fiscal 1998-that compares pretty favorably with $2.1bb and $91mm in revenue and profit for Fiscal 1997. Good luck.