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To: Maurice Winn who wrote (25146)	3/26/1999 6:33:00 AM
From: SKIP PAUL	Respond to of 152472

March 26, 1999 05:08 INTERVIEW-Ericsson in great leap forward in China By Matt Pottinger BEIJING, March 26 (Reuters) - Just days after fretting about its fortunes in China, a surprise deal with Qualcomm has given Ericsson pole position in the world's fastest growing mobile phone market, Ericsson's China chief said on Friday. "We see it as a major step forward out here," said Michael Ricks, the Swedish telecommunications company's China president. Ericsson was worried after China signalled it would allow Chinese telecommunications firms to build networks based on American CDMA technology. That is the rival to the GSM networks sold by Ericsson and other European firms, such as Finland's Nokia . "It's not good news, of course, if it happens," an Ericsson executive told Reuters earlier this week after word spread that China Unicom hoped to roll out a 40 million-subscriber CDMA network over five years. But Ricks said the situation flip-flopped with Ericsson's announcement on Thursday that it was buying the wireless network business of San Diego-based Qualcomm Inc -- the company that developed the CDMA standard. "We'll be able to sell into both" the CDMA (Code Division Multiple Access) and GSM (Global System for Mobile Communications) markets in China, he said. That would allow Ericsson to compete with CDMA equipment vendors such as U.S.-based Lucent Technologies and Motorola , Canada's Nortel and South Korea's Samsung, which are now vying for a piece of China's multi-billion dollar mobile phone market. The Qualcomm unit bought by Ericsson has already begun preliminary negotiations with China Unicom about selling CDMA equipment, a source familiar with the deal told Reuters. Ricks said the company would be ready to compete if Beijing gave the green light to CDMA. "In conversations that we've had with officials out here, I think they're also quite pleased with this move," he said. In 1998, China overtook the United States as Ericsson's largest market, with more than $2.8 billion in sales. Thursday's deal also settled a nasty legal battle between Ericsson and Qualcomm over patent rights that would have complicated the transition to the next generation of mobile phone technology. The two companies will now share royalties on CDMA handsets and equipment, and back a unified international standard for so-called third generation technology, such as video phones and hand-held wireless Internet browsers. Until now, it was expected that competition between CDMA and GSM would continue as the systems upgraded into slightly different third-generation technology. Ricks said the settlement of the patent issue would give consumers hand-held devices that operate on either standard. "They'll be able to have one phone in the future that roams between those different networks," he said. "It's great news for the whole industry. We're pretty happy about that."

To: Maurice Winn who wrote (25146)	3/26/1999 6:35:00 AM
From: SKIP PAUL	Respond to of 152472

March 25, 1999 13:06 Salomon Analyst Pondering New $110-$115 Target On Qualcomm (QCOM) (NewsTraders.com)-- Salomon Smith Barney analyst Alex Cena is revisiting his old price target on Qualcomm Inc. (QCOM) in light of today's deal to settle a bitter patent dispute with Sweden's Ericsson (ERICY), according to a source at the firm. Cena, whose previous target on the San Diego-based company was $80 per share, now says a new target in the $110-to-$115 range could be established after he fully reviews the deal and listens in on an analysts' conference call. Cena kept the stock at "buy" despite it smashing through his old target. Shares of Qualcomm recently trading at $95, up $7.63, or 8.7%. Shares hit a new all-time high of $98.56 in intra-day trading. Copyright 1999 NewsTraders Inc. All Rights Reserved 13:06 Thursday, March 25, 1999

To: Maurice Winn who wrote (25146)	3/26/1999 6:38:00 AM
From: SKIP PAUL	Read Replies (1) \| Respond to of 152472

Deal Between Ericsson, Qualcomm Could Speed Technology Advances By QUENTIN HARDY Staff Reporter of THE WALL STREET JOURNAL Sweden's Telefon AB L.M. Ericsson made peace with Qualcomm Inc., in a wide-ranging deal that could speed development of advanced wireless technologies. Ericsson, as part of a settlement of a long-running patent-infringement dispute, agreed to support Qualcomm's wireless-phone technology and buy Qualcomm's wireless-infrastructure business. Financial terms weren't disclosed, but analysts estimated that Ericsson is paying slightly less than $1 billion for the Qualcomm operations. For consumers, short-run benefits of the pact include more "multimode" phones that can work in more cities. Over the longer term, agreement on a next-generation standard could accelerate the development of products such as phone-based Internet browsers and laptop computers capable of video-conferencing from a remote location. A Clearer View Shares of both companies rose on the news, which analysts said improved their respective competitive positions. Ericsson gained access to a big part of the U.S. wireless market where it was absent, these analysts noted, while Qualcomm sold a money-losing venture that had distracted it from technology-development efforts. "All the investors are breathing a sigh of relief," said Matt Robison, senior technology analyst at Ferris, Baker Watts in Baltimore. "It's conceptually clearer for both of them." In trading on the Nasdaq Stock Market Thursday, shares of Qualcomm rose 13%, or $11.0625, to $98.4375. Ericsson's American depositary receipts were also higher, at $6.3125, up 43.75 cents, in over-the-counter trading. Technology Backer Qualcomm, based in San Diego, is a key backer of a digital wireless technology called CDMA, or code-division multiple access, that is the fastest-growing standard and is widely used in the U.S. Ericsson is a huge maker of phones that use a rival standard called GSM, or global system for mobile communications, that is the most widely used standard around the world. Ericsson had long criticized the promises of CDMA proponents, and sued Qualcomm in 1996 for patent infringement. The standards battle contributed to a proliferation of incompatible wireless systems, as well as phones that work in some cities but not others. CDMA elements also were slated to be used in a next-generation technology, dubbed 3G, that supports high-speed data and video as well as voice. The squabbles slowed progress on 3G, and led phone companies to worry that their existing equipment wouldn't work with future 3G phones. Under the deal, announced Thursday, the two companies agreed to pay unspecified royalties for sharing patented technologies. They also will jointly support international regulatory approval of a single 3G standard. Equipment based on the new standard should be able to interoperate with GSM, CDMA and a third popular technology, TDMA, or time-division multiple access, the companies said. Sven-Christer Nilsson, Ericsson's president and chief executive, said he hopes to see approval of an international standard for 3G by November. He added that Ericsson will market a handset for current CDMA technology sometime in 2000, broadening its business. Qualcomm's infrastructure business, which Ericsson is buying, manages traffic from wireless handsets to regular phones and other wireless devices. Ericsson will employ more than 1,000 people now working for Qualcomm, which had 10,500 employees before the deal. "Ericsson will have a presence in San Diego, and we'll have a lot of common interests," said Irwin Jacobs, chairman and chief executive of Qualcomm.

To: Maurice Winn who wrote (25146)	3/26/1999 11:08:00 AM
From: JGoren	Respond to of 152472

I think you hit the nail on the head as to why sell infra. I also think if the company is using the Intel model, Q thought it might be better for infra ASIC sales not to be in direct competition with the infra manufacturers, esp. since it takes so much overhead to sell and install around the world. Handsets a little easier; there's plenty of demand for everyone to do well, and it's probably more crucial to manufacture and develope chipsets for the handsets from an R&D point of view.