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

To: Clarksterh who wrote (25138)	3/26/1999 8:42:00 AM
From: DaveMG	Respond to of 152472

Clark… Thanks for stimulating the collective brain…. Here's another idea to chew on. It's been at least a year since the 3G fight started. At the time CDMAone was in much more precarious position than today and QCOM was dumping resources into infrastructure development, vendor financing, handset production, including making good on all those screwed up handsets. Handsets were still big and clunky, talk and standby times low etc. QCOM could hardly roll over when ERICY&NOKIA proposed WCDMA at such a critical juncture in the evolution and deployment of CDMAone. Operators who had gambled on the new technology would not have been overjoyed to discover their networks isolated, and QCOM itself might face extinction if this new global standard were expected to predominate. Q's infrastructure division, built at great cost in order to get the game off the ground, was about to become profitable, or so it seemed. To say that Q has gotten none of the things it went after originally may be true in the literal sense but may no longer be relevant. In the interim. Japan is up and running, Mexico has a big build out and global infrastructure/system sales for all standards have stalled as a result of the negotiations and the “financial crisis. Q ASICS have greatly improved and its probably become much clearer to mgmt where their bread is being buttered, which fights to fight and which to leave to others. Let's not forget that it's also been a grueling period for shareholders, a fact which surely has not bypassed the attention of management. Letting go of infrastructure at this juncture might really be the right thing to do. Q has done its part in the standards fight to protect CDMAone operators but should Q be tethered so closely to IS95 forever. The patent reaffirmation disclosed 2 days ago gives some indication of what's going on. As we've long conjectured, no CDMA system can be built without Q. Yes the court case would have proven that, but as Engineer has suggested, at what cost to all, including Q? Without infrastructure, Q doesn't have to pretend it's trying to become Lucent, Motorola, Nokia or Ericsson and can be judged on the basis of a separate model. And don't forget the Koreans are also entering the fray, usually a harbinger of falling margins. It eliminates a conflict of interest as it attempts to sell CSMs to infrastructure vendors and it no longer matters so much to Q which standard predominates, as long as CDMA it is. Yes it's true that ERICsson MAY still push WCDMA at the expense of CDMAone, but I assume QCOM has assured that our interests will be taken into account when it comes to royalties. It also seems that the infrastructure deal is much more complex than they pay us X dollars and we're rid of it forever. Hopefully we'll get more details soon. To me the most important concerns you've raised are how will Q be able to continue producing mkt leading ASICs and other breakthroughs like HDR without an infrastructure “partner”, although it seems they're hanging on to G*. And will Q be able to leverage its mkt leading ASIC position in CDMAone into whatever the future standard becomes. I'm also not so happy about financing LEAP, but so it goes. There's also Brazil which nobody else has mentioned. DMG PS:-) Why won't you be on the call asking you questions? The more of us ask questions the more likely we'll get some answers.