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

To: waverider who wrote (8463)	2/12/1998 1:08:00 PM
From: Caxton Rhodes	Read Replies (4) \| Respond to of 152472

From BofA RS&Co. Yesterday was the analyst meeting and here's what they have to say: Earnings: There is great uncertainty with earnings estimates over the next few quarters, they don't believe that investment opinions should be based on them for that reason. They plan to discuss future earnings with management later. QCOM was optimistic based on: 1) dual mode 800 Q in April, 2) GSTRF gateways, 3) break-even infrastructure in the foreseeable future, 4) improvement in phone profitability albeit lower base in Q2 98, 5) guarded optimism on ASICs and margins, 6) improved royalties as the rest of the world begins to outweigh Korea. RS&CO's primary basis for their by rating on the stock remains QCOM's demonstrated ability to commercialize cdma technology. They see the Asian crisis as reducing growth by 1) reducing growth in countries with low penetration and 2) the new subscribers in high penetration markets are price sensitive and tend to chose lower priced phones. As far as W-CDMA goes, all contending standards require QCOM's IPR. Whatever happens there will not likely be a positive or negative impact on revenues until 2000-2002. Qcom appears to be in a very strong position because they own the IPR. The world does appear to be going cdma in one form or another. IS-95 systems are very successful wherever they are deployed. They seriously doubt that anything Nokia or Ericy can come up with a wide band system that can out perform what cdmaOne will produce. Qcom may, through its IPR, to force the European Union to open the market to IS-95 systems, particularly if they are compatible with GSM. Qcom has already demonstrated that it can be done. At worst, the overlay technology will have success where operators are free to choose while collecting some sort of royalties form other regions where W-CDMA is being used. Nokia and Ericcson are expected to minimize the relative importance of QCOM's IPR in the ETSI standards however they can. They believe that ericy's patent infringement suit is the first salvo in that battle. RS&CO believes that qcom is likely to become a leading manufacturer of equipment for any open cdma standard that is adopted. They expect qcom to capture a significant share of equipment orders for any ETSI W-CDMA standard if such a market develops. They believe that the stock is attractive at current valuations. They believe that the current price is based on IS-95 solely and does not include the potential upside from a meaningful role in other cdma based standards. Caxton