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

To: Shi who wrote (6609)	12/18/1997 3:20:00 PM
From: Maurice Winn	Respond to of 152472

Shi, Qualcomm sells handset ASICs to Samsung, LG, Maxon etc. They also collect maybe 3% or 5% royalties [total guesswork, Gregg's comment etc]. Total cost maybe $30 [total guesswork] per phone. These things sell for hundreds to retailers, so most of the price is made up in Korea with employees, interest rates there, electricity and all the rest. Since they have all just had a 50% pay cut in US$, it seems to me that they are going to sell a LOT of cdmaOne handsets around the world at a cheap price. So Koreans deciding whether to buy a phone or not will be looking at the same Won prices more or less as a month ago. Phones are a high priority - higher than cars, overseas trips or fancy dinners out. Or even golf memberships. So sales shouldn't drop off too much there. But what a lot they'll sell overseas. So Nokia is in trouble. Ericsson too of course - but that goes without saying. Also Motorola. Qualcomm and Qualcomm Personal Electronics will also find the going harder in handset sales. Jim didn't like the suggestion but there is an easy answer. The USA Federal Reserve prints another multibillion dollars - already done or underway. Qualcomm, which is pretty flush with cash, simply goes shopping in Korea for any defunct cdmaOne producers, boosts production massively, moving production lines from USA if need be, and starts counting the great profits. No sweat. cdmaOne handset demand won't outpace supply for long Shi. That simply means prices are too low - but the answer is to boost production toot suite. That will happen. So, who cares if the Won is wan? Good for Qualcomm. Good for cdmaOne. Bad luck for property speculators in Korea and their lenders. Qualcomm will buy some buildings though, to house cdmaOne production lines. Mqurice