Post of the Day
July 19, 2000

Board Name:
QUALCOMM, Inc.

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Subject:  CNBC Tomorrow
Author:  stocksure

Morgie wrote:

Dr. J will be on CNBC business center tommorrow. I hope he gives em hell and takes names later.

Give 'em hell? The commentary there is so laughable that he won't have the chance. Here's my best guess as to what actually happens:

Setting: CNBC 7:00 P.M. Tomorrow

Sue Herrera: Today we have with us on Business Center Dr. Irwin Jacobs, Chairman and CEO of Qualcomm.com. Dr. Jacobs, it's good to have you here.

IJ: Thanks Sue. It's great to be here. One thing, however, you got the company's name wrong. It's just Qualcomm. No .com at the end.

Joe Kernen: Ah, I see. A name change. A PR tactic to show that your company's now moving towards profitability?

IJ: No, we've never had a .com at the end of our name, and we've been profitable for several...

Kernen: Yeah, but at look at how much your stock's dropped! Gimmicks aside, you've got to be an unprofitable internet company coming to grips with changes in investor sentiment?

IJ: No, we're not. If you look at our latest earnings release, you'll see that not only are we very profitable, we also have billions of dollars in cash in the bank, and no debt to speak of.

Kernen: I see...but what about your revenues? There's almost no growth there whatsoever. You know, you just can't expect Wall Street to give you the multiples you guys are used to when you're posting numbers like that.

IJ: The low revenue growth is a result of the sale of our unprofitable handset business to Kyocera. Thanks to the sale of this division, Kyocera is now playing a major role in boosting our bottom line, as they now purchase millions of...

Kernen: Dr. Jacobs, you can continue to talk your way out of these pressing problems your company's facing, but the fact remains that these problems exist, and the action taking place in Qualcomm's stock reflects this. After all, all of us at CNBC know that stocks always go down for a reason.

IJ: I have to disagree with you Joe. I think the primary factors that have been driving down our stock stem from some needless fear and uncertainty regarding Qualcomm's role in the coming worldwide deployment of 3G wireless communications systems. Now, if you'll allow me to explain, I'll show you how Qualcomm is poised to...

Ron Insana: Pardon me, Dr. Jacobs, but will everyone really go for these (bunny ears) 3-G systems? I mean, I'm perfectly content here with my good old analog phone, and I'm sure there's millions of other people who feel the same way, don't you think?

IJ: Actually, most of the world's subscribers now use digital wireless networks, and among the competing technologies that go into these digital networks, CDMA, the standard Qualcomm promotes, is the fastest-growing...

Herrera: I'd have to agree with Ron here. Do we really need these new-fangled digital phones? It seems like a huge waste of money to me. You know what I would pay for, though? Wireless internet access. You know, being able to get stock quotes, check your e-mail, do videoconferencing, all on your cell phone. Maybe if you got your company to move into this market, like Sprint PCS is doing, then maybe Qualcomm's stock would start performing better.

IJ: Sprint PCS is a CDMA carrier. Their entire network is based on Qualcomm's technology. Most of the phones their subscribers use have Qualcomm's chips inside of them. Qualcomm will profit greatly in the following years not only from the continuing growth in Sprint's business, but also from the growth that other carriers around the world, in the Americas, in Europe, in Asia, and elsewhere, will see as they roll out third-generation voice, data, and...

Kernen: Slow down here, Dr. J. What's this talk about Asian rollouts? Last time I heard, the Chinese said that they didn't want your CDMA technology. What do you have to say about that?

IJ: China Unicom has merely postponed the upgrade of their GSM networks to CDMA. Starting in 2001...

Insana: Hey, what's all this talk about "postponements?" It sounds to me like they don't want your technology.

IJ: Both China Unicom and its chief rival China Telecom have re-affirmed their commitment to third-generation CDMA rollouts. The postponements were merely the result of some payment disputes we've had...

Insana: It doesn't sound like they're too "committed" to me. They've got enough time to steal America's nuclear secrets, but they refuse to just pay you and get going with a rollout of your technology? Gimme a break.

IJ: I'll pretend that I didn't hear that. In spite of what some may think, within several years, the overwhelming majority of the world's wireless networks will be making use of some form of Qualcomm's third-generation technology. In fact, starting in the third quarter of this year, South Korea's SK Telecom will be implementing 1xMC, a precursor...

Kernen: I've been hearing otherwise Irv. As you may know, Chase Hambrecht & Quist Analyst Ed Snyder has recently made some negative comments on Qualcomm's position in the South Korean market, and in the wireless industry at large. Specifically, Mr. Snyder has said that Qualcomm's position in the South Korean market is currently very weak, and that when future wireless upgrades are made, the South Koreans, along with most of the rest of the world, won't be using your vaunted CDMA.

IJ: I believe that Mr. Snyder's very mistaken. First of all...

Insana: Whoa, there! You've got some nerve, making comments like that about the abilities of an actual Wall Street analyst. Talk about arrogance.

Kernen: It happens, Ron (shaking his head), when you've got these young dot.com CEOs, getting stock options and coming out of nowhere to make a fortune. You'd like to expect better out of them, but you just can't.

IJ: Look, I'd just like to clear up a few misconceptions the public has about my company. I would really appreciate it if you stopped interrupting me along the way.

Kernen: OK Doc, whatever you say.

IJ: Thank you. Now, as I was saying, Qualcomm is on the verge of playing a pivotal role in ushering in a new era of wireless...

Herrera: That's about all the time we have for today. Dr. Jacobs, thank you for joining us.

IJ: Uh...thanks Sue (thinking in his head: it could've been worse, I could've been interviewed by The National Enquirer).

Herrera: Ladies and gentlemen, Dr. Irwin Jacobs, Chairman and CEO of Qualcomm.com.

Eric


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