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

To: Perry LaForge who wrote (21305)	1/14/1999 2:37:00 PM
From: Ruffian	Respond to of 152472

Here It Is> Global CDMA Operators Offer Comprehensive Proposal to Harmonize Third Generation Wireless Standards; CDG Calls for Global 3G Summit to Work Collectively on Unified Resolution COSTA MESA, Calif., Jan. 14, 1999 - A broad group of cdmaOne operators today released a comprehensive proposal to harmonize third generation (3G) wireless technologies, including W-CDMA and cdma2000, that have been proposed to the International Telecommunications Union (ITU) for IMT-2000. The proposal is being discussed with other operators from around the world this week. The proposal is based on the ITU's goal of a global standard based on the Fam-ily of Systems concept and builds on the many compromises that have already been reached in discussions between standards organizations in Japan, Korea and North America. To resolve the global 3G standards debate, the CDMA Development Group (CDG) has called for a 3G Summit to include operators, manufacturers and industry groups from around the world to convene. "It is very encouraging to see operators active in addressing convergence and present a detailed proposal for compromise," said Perry LaForge, executive director of the CDG. "Furthermore, we believe a 3G Summit is necessary to bring all parties together to finally resolve this issue. We hope to work closely with the operators, manufactures and industry groups over the next few weeks to end the deadlock." The significance of the operator proposal is that it is technically comprehensive, focusing on several key parameters that must be addressed in any convergence discussion, and incorporates the results of technical discussions between ARIB and TIA as a foundation. The proposal addresses aspects such as channel structure, pilot structure, inter-base station operation and frame length. LaForge continued, "Any convergence proposal should build on the accomplishments that have been achieved thus far in resolving this issue. We have continued to emphasize that convergence offers lower research and development costs, worldwide roaming, stronger wireless competition with landline telecommunications systems, fulfillment of the ITU IMT-2000 goals, and increased customer satisfaction." LaForge concluded, "In addition to reaching compromise, it is critical to ensure a process is in place to implement the agreement of a converged standard - - the partnership project approach is a viable mechanism for this process. However, we are deeply concerned about recent statements from ETSI indicating that the 3G Partnership Project, which includes the US standards organization Committee T1 as a partner, will effectively bypass the ITU process. This continues to indicate ETSI's lack of concern for harmonization of cdma2000 and WCDMA. We are addressing this issue with the appropriate entities." The CDMA Development Group (CDG) is a nonprofit trade association formed to foster the worldwide development, implementation and use of cdmaOne. The 100 member companies of the CDG include many of the world's largest wireless operators and equipment manufacturers. The primary activities of the CDG include development of cdmaOne features and services, public relations, education and seminars, regulatory affairs and international support. Currently there are more than 500 individuals working within various CDG subcommittees on cdmaOne-related matters. For more information about the CDG, contact Christine Bock of the CDG News Bureau at 714/ 540-1030, ext. 11, e-mail chrisbock@bockpr.com or visit the CDG website at cdg.org. ***cdmaOne is a trademark of the CDG

To: Perry LaForge who wrote (21305)	1/14/1999 3:25:00 PM
From: Gregg Powers	Read Replies (4) \| Respond to of 152472

To all: My partner and I visited Qualcomm last Friday and the "nefarious" reason behind my absence from the forum was a recalcitrant modem in my laptop. Given our visit's proximity to the pending earnings release, we agreed beforehand that there would be no discussion of the December quarter (so I have nothing new to share in this regard). So briefly, what DID I learn? /1/ management firmly and passionately believes that a converged 3G CDMA standard is an inevitability not just a possibility. One insight that I found particularly interesting was the belief that "3G" is more of a marketing ploy than a specific business opportunity, designed to provide cover for TDMA-based GSM's migration to direct sequence spread spectrum, i.e. CDMA. Perhaps even Ericsson lacks the temerity to simply tell its customers "oops...we sold you a bill of goods and now you need to replace all your network RF equipment and handsets." Suffice to say, Qualcomm remains extremely confident in its IPR position. Beyond this, while the company has tabled a POSSIBLE reduction in royalty rates in exchange for convergence, I do not believe that management would consider any deal that was not accretive to royalties in aggregate. /2/ We toured QPE and were delighted to see the progress being made in factory automation and cost reduction. Assembly time has come down significantly and testing procedures have been automated and improvements have been made throughout the organization, beginning with the R&D process and extending right down to packaging protocols. While we know empirically that gross margins have been improving, it is nice to understand why this is occurring and even more encouraging to know that there is still much more to go. Thank you Jack Dollard. /3/ The ASIC business is going very well and benefiting from accelerating subscriber growth in both the U.S. and Japan. The MSM3000 promises to significantly improve phone performance metrics, i.e. size, form factor and talk and stand-by times, and I suspect that, before long, Tero will have very little to talk about in this regard. /4/ I continue to believe that most analysts are underestimating the company's royalty growth. Royalties will benefit from accelerating worldwide subscriber growth, a strengthened Korean Won and a rapidly growing royalty stream from non-Korean licensees. Since royalties are virtually dollar-for-dollar profit, I believe that Qualcomm is purposely very conservative in its guidance regarding this P&L line item...we'll get an empirical confirmation (or not) of this hypothesis next Tuesday. /5/ I was pleasantly surprised to hear that Omnitracs is doing very and that the business has a number of interesting growth prospects. Those that are interested should read the 10K and understand the expanded business mandate and new products such as Trailer-Tracs. It's funny, but I think this little "throw-in" business is a jewel that could be worth up to $1 billion. /6/ Infrastructure. Here is where things got really interesting and more than a little oblique. Management is clearly intent on reducing and/or eliminating this unit's drag on the P&L and balance sheet. Since I believe that the infrastructure unit is costing the company more than $1.00 per share in EPS AND that these losses are reflected in the company's current $2.50 to $2.70 EPS guidance (for FY99), any action that reduces this P&L drag significantly would increase the company's near-term EPS opportunity by a fairly important margin. Perhaps more important than all the aforementioned sound bites was management's articulated interest in "unlocking the value of the company", to more tightly manage the business and to improve shareholder value. Courtesy of Korea and a handful of manufacturing problems last year, Qualcomm's PE has eroded steadily and, to my eye, unjustifiably so. Based on everything I saw last Friday, I firmly believe 1999 will be the year when the company's manufacturing operations close in on world-class status; where geographic diversity of CDMA deployments prevent a repetition of the Korean fiasco, the business model realizes some powerful operating leverage and the world adopts a single digital wireless standard based on CDMA. It has been a long-time in coming for our diamond in the rough, but I suspect the ultimate outcome with prove worth the wait. One final comment. I visited seven companies on my most recent road trip. In my opinion, the quality of management that I interviewed varied widely from merely adequate to truly outstanding. But at the risk of sounding like a drooling sycophant, I have to say that Irwin Jacobs is simply in another league. Most every manager can articulate the corporate business strategy, many can do it will passion and fervor, but very few, precious few, are inspirational. Rarely do I feel privileged to have spent an hour with management, particularly so when my firm is a large shareholder. Still that is the only way to describe my sentiment after spending time with Irwin. Enough said. Best regards to all, Gregg

To: Perry LaForge who wrote (21305)	1/14/1999 9:01:00 PM
From: Robert Sheldon	Respond to of 152472

Mr. LaForge: Are you familiar with the State-run Chen-Hui Company of Beijing? They are negotiating a sales and distribution joint venture with VARL , a handset component supplier of VCOs and PLLs. I am particularly interested in their involvement in the 2G and 3G rollout in China. Thank you in advance for your thoughts.

To: Perry LaForge who wrote (21305)	1/14/1999 9:16:00 PM
From: Drew Williams	Read Replies (2) \| Respond to of 152472

<<Also wanted to make you aware of our conference in Australia (March 15, 16th). Will focus on Australia and New Zealand. Let your friends down under know about it.>> Perry, Since your March conference will be relatively close to Mqurice's home, it seems to me that you should invite him to attend as your keynote speaker. In fact, a round-trip, first class airline ticket from New Zealand to Australia and back (along with several days greens fees and a case of Sherry) does not seem to a very high price to hear his cogent discourse on his revolutionary orthogonal p.....g theory, etc. Mqurice's talk would be much more interesting than the usual technical arguments about chip-rates and stuff. It would be even more interesting (to say the least!) to know how your other attendees react to his unique perspective. By the way, our other friend, Surfer Mike, could make even that boring technical stuff interesting if you brought him down to speak, too. You wouldn't even need to buy him an airline ticket, just some board wax. I just looked at my daughter's globe, and it's all downhill from Mike's home in San Francisco to Australia!