What do you guys think of this one?
Subject: QUALCOMM Provides Update on Korean Market Impact and Other
Events
The following news release was issued at 1:44 pm today:
Contacts:
Julie Cunningham
Investor Relations
Phone: (619) 658-4224
Fax: (619) 651-2590
Christine Trimble
Corporate Communications
Phone: (619) 651-3628
Fax: (619) 651-2590
QUALCOMM Provides Update on Korean Market Impact and Other Events
- Company Expects Reduction in Second Quarter Earnings From Prior Quarter -
SAN DIEGO - February 5, 1998 - QUALCOMM Incorporated (NASDAQ: QCOM) today
announced that it expects a reduction in second quarter earnings and
Communications Systems margin from the prior quarter, due primarily to
recent events involving its customers in South Korea.
Two Korean manufacturers have just requested a partial cancellation or
postponement of second quarter orders of Application Specific Integrated
Circuits (ASICs). Further, following a recent visit to Korea, the Company
concluded that a previously announced order for 1800 MHz Q phones will not
be fulfilled. Sales of the Q phone are expected to be lower than planned
in the second quarter due to the loss of the Korean order for 1800 MHz Q
phones, the delay in introducing the 800 MHz cellular Q phone, and a recent
reduction in demand for 1900 MHz PCS Q phones. Demand for the QCP models
remains strong, and production ramp up at QPE continues.
"We are confident that, despite the current economic turmoil, the Asian
markets including South Korea represent vibrant long-term opportunities for
QUALCOMM and CDMA," said Dr. Irwin Jacobs, chairman and CEO of QUALCOMM
Incorporated. "We are working actively with our Korean customers to help
them weather this difficult economic downturn. CdmaOne technology
continues to be rapidly deployed around the world. Although the financial
markets remain in a state of flux, we anticipate the weaker won will
strengthen Korean suppliers in their export of CDMA and other products in
future quarters. Further, we do not believe that the economic downturn in
this region will delay global acceptance of cdmaOne, now present in more
than 30 countries around the world."
Despite the continuing ramp up in capacity at QPE, the Company is reducing
its manufacturing workforce by approximately 700 temporary workers this
week. This reduction is partly due to the change in mix between the Q
phone, with its higher labor content, and the QCP portable phones, with
their lower labor content, and partly to ongoing cost improvements and
increased manufacturing efficiencies. The Company previously indicated
that temporary employment levels at QPE vary with changes in production
levels.
QUALCOMM continues to lead the evolution of cdmaOne, including higher data
rates and capacity and the recent successful demonstration of a GSM/CDMA
overlay system. Looking forward, the Company notes the now central role of
the Company's technology in third generation (3G) systems, as indicated by
the selection of W-CDMA by the European Telecommunications Standards
Institute (ETSI).
Headquartered in San Diego, QUALCOMM develops, manufactures, markets,
licenses and operates advanced communications systems and products based on
its proprietary digital wireless technologies. The Company's primary
product areas are the OmniTRACS system (a geostationary satellite-based,
mobile communications system providing two-way data and position reporting
services), CDMA wireless communications systems and products and, in
conjunction with others, the development of the Globalstar low-earth-orbit
(LEO) satellite communications system. Other Company products include the
Eudora Pro electronic mail software, ASIC products, and communications
equipment and systems for government and commercial customers worldwide.
For more information on QUALCOMM products and technologies, please visit
the Company's web site at <http://www.qualcomm.com>.
Except for the historical information contained herein, this news release
contains forward-looking statements that are subject to risks and
uncertainties, including the Company's ability to successfully manufacture
and sell significant quantities of CDMA handsets, ASICs and infrastructure
equipment on a timely basis, changes in economic conditions of the various
markets the Company serves including the Asian markets, continued currency
fluctuations and risk, the ability to develop and introduce cost effective
new products in a timely manner, potential delays in the commercial
implementation of the Company's CDMA technology, continued growth in the
CDMA subscriber population and the scale-up and operations of CDMA systems,
developments in current or future litigation, the Company's ability to
effectively manage growth and the intense competition in the wireless
communications industry, risks associated with vendor financing, timing and
receipt of license fees and royalties, failure to satisfy performance
obligations, as well as the other risks detailed from time to time in the
Company's SEC reports, including the report on Form 10-K for the year ended
September 28, 1997 and most recent Form 10-Q.
###
QUALCOMM, OmniTRACS and Eudora are registered trademarks of QUALCOMM
Incorporated. Globalstar is a trademark of Loral QUALCOMM Satellite
Services, Incorporated. cdmaOne is a trademark of the CDMA Development Group. |
