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

To: Maurice Winn who wrote (21467)	1/17/1999 4:37:00 PM
From: SKIP PAUL	Respond to of 152472

Breaking Up Is Hard to Do Reuters 7:30 a.m. 14.Jan.99.PST BEIJING -- A long-anticipated overhaul of China Telecom would split the state giant into four separate companies, each responsible for a different sector of the industry, an official newspaper said on Thursday. "The Ministry of Information Industry and related departments have given their final verdict: China Telecom will be chopped in four," the Workers' Daily said in a front-page article. The restructuring, to be implemented "in the near future," would establish separate companies for paging, cellular, satellite, and fixed-line services. An official at the government ministry that controls China Telecom, however, denied that a final decision had been reached on a break-up. Nonetheless, the report -- and others like it in recent weeks -- seemed to pour cold water on speculation that the shake-up would be along regional lines. According to the Workers' Daily, the new companies initially would be barred from engaging in each other's services before competition would be permitted. And industry experts were quoted as being critical of the plan's failure to chop up China Telecom's entrenched fixed-line network. Foreign analysts said that more details would be needed to determine the effects of a break-up on foreign investment and business opportunities, but some expressed doubt that it would spark domestic competition. "It's more a consolidation than a break-up," said Edward Lanfranco, senior analyst at China Research Corp. in Beijing. He cited as an example the ministry's current move to merge its scattered jumble of local paging service providers into unified -- and more profitable -- regional subsidiaries. Copyright© 1999 Reuters

To: Maurice Winn who wrote (21467)	1/17/1999 4:55:00 PM
From: gdichaz	Read Replies (2) \| Respond to of 152472

Maurice: Thanks. One point of clarification if you will. Are you saying that ATI owns a chunk of the Q itself and so now Vodaphone will? Knew Vodaphone owned some of Globalstar. Now it makes more sense that the Q and VOD cooperated in testing the CDMA overlay to GSM. Wheels within wheels, no? Good news indeed. Chaz

To: Maurice Winn who wrote (21467)	1/17/1999 5:22:00 PM
From: DaveMG	Read Replies (4) \| Respond to of 152472

Mquarice... 100mil/quarter is an awful lotta dough. I wonder if this could be true, 400mil/year divided by say 70 mil shares is almost 6$ per share..Is this really possible? IMO this has to be an exaggeration. But lets suppose it is true, what are the implications? At breakeven Q would have earned about $7.50/share last year or about 525 mil., a net margin on 3.5 bil of 15%, which sounds a bit high considering all of the handset returns and bottlenecks. Did I run through the numbers properly? This would really be astounding but would it make sense to sell off the division now? 3G is going to be the mother of all wireless upgrades and Q ought to be in position to get some reasonable piece of that business, especially after their showcase Mexican network is up and running some variant of CDMA2000. And I would think that IS95 carriers would feel some sense of indebtedness if a converged 3.6x chiprate standard is ultimately achieved. Wireless Knowledge is also going to drive infrastructure deployment in addition to consumer devices. Then there's wireless local loop where Q is running trials all over the place, implementation of which has been hindered by serial financial crisis. Maybe it's worth taking these losses for another year or so, especially if Q can make EPS progress of 50% despite them, when one considers the future potential. I do wonder though whether when the crunch comes this division will be large enough to compete with the likes of LU,NT,MOT, as well as Nokia and Ericcson. Perhaps partnering would be the right thing to do. I suspect it would be a waste of a lot of this investment if the division were sold of just before some sort of 3G arrangement is made. And I can't believe we would get anywhwere near the 6$/share in stock price appreciation that breakeven would represent. I'll say it again. THIS NUMBER IS ASTOUNDING! It's probably wrong. The nice thing about it though is that it gives us some idea of what could happen if things are really clicking,no manufacturing problems, higher ASIC volumes, higher royalty rates once GSM moves to CDMA. WOOOOOOOOOOWWWWWWWWWW! Unfortunately though, it makes me more concerned than ever about the liklihood of a hostile takeover. I'd be sorely dissappointed if a severely undervalued Q were folded into an overpriced 50 bil+ company. DMG

To: Maurice Winn who wrote (21467)	1/17/1999 6:40:00 PM
From: Clarksterh	Read Replies (2) \| Respond to of 152472

Maurice - But if a slightly higher chip rate does in fact slightly improve efficiency, which QUALCOMM has said should be tested in practise and the most efficient system should be adopted, then the backward compatibility to existing cdmaOne should be ignored because the colossal amount of WWeb equipment to be sold will make the existing cdmaOne equipment a mere drop in the ocean. You're assuming that there is a black and white here. The fact is that differences this small are in the eye of the beholder. For instance, everything else being equal, the higher chip rate will accommodate higher data rates. Period? No. If you have a 3.6Mbps HDTV signal then both chip rates accommodate just 1 signal, and the higher chip rate will use somewhat more battery power. Is the difference significant or is it within the uncertainty for performance prediction. Given that the performance prediction is only good to maybe +/- 20%, I would say that this difference is inconsequential. Essentially this is related to the maxim that there comes a point in every project when you need to shoot the engineers and start production. (Note that in a system vs system trade (WCDMA vs CDMA-2000) Qualcomm would almost certainly win with a margin well outside the uncertainty, but when it comes to individual parameters there has to be some arbitrariness or you will never be done.) As for As Gilder's vision of freely available spectrum gains ground, the 5MHz bandwidths, guardbands and such like will become irrelevant. While that may be true, it is also true that that particular reality isn't likely for at least another 5 to 10 years. Should we always hold off on a particular technology because we know it will actually hinder us in 10 years. If so then Intel should never have made the x86 line and GSM and CDMAOne with their imperfect vocoders etc should never have started operation, ... . I am not saying that this trade should not be made, but it should be made from an economic standpoint. Knowing that your proposed technology will be obsolete in 10 years, is it still possible to make money before it becomes obsolete, and will the cost penalty to be paid in 10 years (to revamp the system with the newer technology and suffer with a legacy system) still be economically worthwhile? Clark PS As for the issue of Gilder's vision being a reason to go with the higher chip rate. Hardly, since 4.096 will be equally obsolescent at that point. At that point people will use whatever chip rate they need, and aren't going to be tied to 3.68 or 3.84 or 4.096.