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To: Mike Buckley who wrote (1788)	5/7/1999 7:45:00 PM
From: LindyBill	Read Replies (1) \| Respond to of 54805

You don't consider Qualcomm a chip stock? It is a "system" sale, Mike. You are buying the whole CDMA system. When you buy Cisco, you are not buying a router, you are buying a system.

To: Mike Buckley who wrote (1788)	5/8/1999 10:04:00 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>>You don't consider Qualcomm a chip stock? Good question, Mike - it made me scratch my head and think. I share LindyBill's feelings about chip stocks, and liquidated the last of my holdings in the sector (intc - the best of the lot), back in January of this year. I've been in the semiconductor biz since the early 60s, and know all too intimately the problems inherent to their business model. No, despite their healthy sales of cdma asics, you should not characterize Q as a chip stock. The basic reason is that they are fabless, a fact which I verified on the qcom thread. This means they avoid the repeated multi billion dollar investments in fabs necessary to remain on the bleeding edge of ic manufacturing, which is one of the biggest problems the chipmakers face. As well, Q's asic division doesn't have to guess where the market is going in order to plan their technical roadmap; they just meet with their sister cellphone division and ask them what they are going to need down the road. Maybe one of the Qheads can tell us what percent of revenues/earnings the asic division is projected to be for the next few year, but I'll venture to guess it won't come close to handset or ipr levels. I definitely don't think Q is a chip house. If it was, I'd think twice about plunking my money into it. Frank