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

To: Gregg Powers who wrote (8199)	2/8/1998 12:38:00 PM
From: limtex	Read Replies (1) \| Respond to of 152472

Gregg- your kind of post that makes this and other SI boards worth a great deal of time to read. Contrast with some of the nonsense on Yahoo boards. New kind of college maybe.... Re your comments re Greg Geiling pls see my last couple of posts regarding the "Red Herring.com" article of 4th Feb. I agree with you about this managements integrity. They are clearly great engineers and anyone can be excused for having been caught out in the SEA crash. As I said before on this thread it's happened to major banks in the US and the UK on quite a few occasions over the last twenty years. Greg Geilings article however does raise a few questions particularly as he says that analysts concerns about handset margins were what drove the stock down a month or so ago NOT Korea. This company is in the driving seat in the wireless telephony industry because it has technology, inventiveness, good patents and longevity in these areas. I question now whether they should be in manufacturing at all. Manufacturing is a specialty business all of its own and there you have to confront all sorts of companies with various agendas. NOKA for instance and ERICY are really important to their countries. They will undoubtedly have their governments support (in all sorts of very creative ways) and when they come across an insurmountable patent or technology issue they will create a political solution. I doubt Qualcomm has that ability yet. Governments around the World have recently discovered the telecom industry as something that charges customers (referred to in Europe sometimes as "subscribers" in order to avoid their being associated with a market environment) by the minute. This appears especially attractive to government employee types who have only worked out how to charge customers ( read "taxpayers") either by the year or by a percentage when they buy things (sales tax/VAT). Now these guys have worked out that they can sell (privatize) these telecom businesses to the markets ( read "taxpayers"), get a huge multiple, then keep about 30% of the earnings as taxes, then allow competitors to enter ( again for a fee) and lastly when a brand new technology like wireless comes along ...well guess what sell it again for a fee. The point I am trying to make here is that if you have the right to charge fees (or royalties) then do that and that alone. Become an expert in how to get the last ounce out ( just like the privatizing governments have done) but don't get involved in operating or manufacturing when others will do and tear eachothers margins to threads because they have no other economc raison d'etre. Q should be using its economic muscle/cash to assist make it economically v.attractive to set up wireless systems. Q for instance has the best Russian material in the business but IMHO if MOT or FON had been on Rostov and not Q their employee wouldn't have had a problem. The handset and hardware manufacturing sided is going to go into the same comptetive and oversupply condition as the hard-drive industry. What other major employment opportunities are there in Finland for instance or even in telecom in Sweden. These countries are fighting for their economic lives and they have v.big social services to support and they don't have Norway's oil. Keep out of their way. Let them go head to head with all the low cost manufacturers springing up all over the World. Do deals with them to license them technology but not exclusively. Do an even better deal with Samsung especially now. Live on lthe licensing because the manufacturing is going to be a never ending nightmare. Follow the old management maxim - "Play to Your Strength and Source Your Weakness" All the above IMHO Regards, L

To: Gregg Powers who wrote (8199)	2/8/1998 8:30:00 PM
From: Carter Patterson	Respond to of 152472

Thanks for posting. I am trying to figure out if manufacturing handsets is key to QCOM's future. I have invested in this stock because of its intellectual property and hopefully its ability to get a 5% royalty or whatever % of the entire industry production. I have always assumed they got into manufacturing as a way to stimulate the CDMA market, rather than be dependent on Motorola or Nokia to produce handsets, with the longer term plan to sell it to a consumer electronics company (Sony is the most obvious). In the short term I think they have been LUCKY to make money on handsets to offset R&D. Unfortunately, I think the analysts focus too much on handsets rather than the expansion of CDMA as a whole. As I said in a post yesterday, QCOM management could do a better job articulating CDMA expansion, estimates of subscribers, conversion of analog to CDMA and royalty rates. Because of legal liability inherent in making these estimates, they could guide analysts using "independent research". It is clear the analysts are fixated on $500 handsets and S. Korea. They need to look at the bigger picture. The key question is : Can QCOM make it on royalties alone if CDMA becomes the dominant standard in the world (except Europe) within 5 years ? (Obviously, most analog users would have to switch in the US and most countries would have to have at least one CDMA provider.)

To: Gregg Powers who wrote (8199)	2/8/1998 9:10:00 PM
From: JMD	Respond to of 152472

Gregg, happy to hear that there are some bright lights in the analyst field and I will keep my eyes peeled for those mentioned favorably. Even I have to admit that predicting earnings is a near impossible job, that lots of these guys/gals are very bright, and that their attention span gets split among a too full workday. That of course is the problem when you're trying to follow a company like QCOM which ain't exactly Quaker Oats. When they do have a whoopsie, a lot of dough gets vaporized. The lesser among them however should find honest jobs in the personal injury field: I'm lucky to know a cell phone from a cordless and have heard them ask questions that make me blush. I'm going to hazard a guess that your fund owns one or two shares more than I do AND that you're on a first name basis with "Irwin". Modesty prohibits me from naming the author, but "we" think that the mighty Q should get "Qualcomm Inside" on every phone just like you know who. If we're gonna get $500 for a Q phone, we gotta do more than Superbowls. Everybody thinks I'm nuts that the Q should go on a sell a phone for zip campaign, and some remain convinced that we could actually make a ton of dough at it. Okay, I'll bite. But that means branding and an appliance that you stick in your ear every day and look at to dial is a great thing to lay your logo on, no? So now you and Dr. Jacobs have something to chat about over the bagels next Tuesday. Aren't you relieved? Regards, Mike Doyle