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

To: limtex who wrote (8202)	2/8/1998 12:55:00 PM
From: kech	Read Replies (1) \| Respond to of 152472

Limtex- In my opinion, your suggestion that QCOM get out of handsets misses the very important role that handset production has played in getting the standard adopted. Schmidt quit the job as CEO of the Sprint Wireless venture because he didn't want to be on the hook for all that investment and not have handsets available. Apparently this happened with GSM sets in Europe when he was setting up a system there. Someone has to guarantee availability of handsets, features and innovation, and QCOM has more incentive to do this for the sake of the standard than many others. You might argue - the time for breaking the "chicken and egg" problem in handset availability is over and the time for thin margins in handset production has begun. It is not clear to me at all. There are new types of innovative handsets that QCOM is investing in that help to drive the cutting edge in CDMAOne access and use. The deal with 3COM and the PalmPilot is a good example. Next will be virtually viewed picture phones etc. As long as there is a role for integrating new services that are linked to CDMA standards there will be a role for QCOM to produce phones which can demonstrate that this can be done. Later, the "me too" companies can commercialize and drive demand for these products. All the while, QCOM gets additional royalties for add-on software and features that it makes available in its ASIC chipsets. I don't want to sound starry eyed but there is a very real role for handset production in a company that derives the bulk of its profits from the worldwide commercialization of CDMAOne. It is using the same strategy of Sony in electronics and hence partnering with them. Sony innovates, Matsushita produces, there is room for both. There is even more room for QCOM to use this strategy since it also benefits from the Matsusita type producers (ie. Samsung etc).