Qualcomm Inc (QCOM)

[khemara_qc]

Wall Street Transcript:Analyst Roundtable Focuses on Trends and Predictions for Wireless Services Sector
Friday June 11, 4:15 pm ET


67 WALL STREET, New York--June 11, 2004-- A TWST Roundtable Forum, leading analysts and top CEOs focus on the Wireless Services sector in a new report from the Wall Street Transcript. View the latest issue online at www.twst.com/info/info932.htm Rapid market growth and strong stock performance fuel the strength of the wireless sector. A roundtable panel delves into issues such as wireless number portability, data service expansion, market share shift, pricing plans, Wi-Fi, WiMAX, regulatory issues, industry risks and stock recommendations.
ADVERTISEMENT


Positioning in the wireless services industry continues to revolve around market positioning, technological efficiency and infrastructure buildout. In addition, opportunity solidifies as the sector continues to converge with the consumer electronics industry and continuing consolidation results in better capitalization and bigger bases

TWST: Ken, what's your take on what's going to be important over the next two or three years?

Mr. Leon: I think it's a matter of being well-positioned for market opportunities. We expect wireless to continue to be viewed as one of the most important places to be in telecommunications. Operators that have a position in wireless are certainly going to benefit in terms of their fundamental growth for the value of their stocks.

What we see in the developed countries over the next two to three years is higher velocity in terms of the replacement cycle of handsets, now with upgraded network platforms with 3G. All of this is emanating from more robust chipsets, either developed by QUALCOMM (QCOM: Buy, $67) or perhaps others that are giving greater feature functionality in the handsets and from more intelligent networks.

What this means, we believe, is that we're going to begin to see the convergence of wireless communications with the consumer electronics industry. Our handsets should have chipset features in them in less than two years which are likely to give you DVD capability, a camcorder function, 6 megapixels with alert focus for camera features, and a wider range of Web-based capabilities. We expect all of these to be at attractive price points from the carriers. That is really what is exciting about planned handset or other wireless device rollouts as you get to the end of 2005 and 2006.

At the same time, we're beginning to see increased market penetration rates in developing countries such as China, India, other parts of Southeast Asia and Latin America. Even with wireless for narrowband voice, wireless looks to be a true replacement for where telecommunications doesn't exist. We think both these forces are going to have positive impact on country economies and also in terms of standards of living. I really see wireless remaining the key driver as it relates to voice over IP or broadband capability. Many of them are likely to be embedded right into wireless platforms.

TWST: As wireless becomes more important, what do the land-based phone companies do about this? Do they become more competitive or get into the space more?

Mr. Leon: We see they are definitely investing heavily in wireless, whether they have the business today or plan to acquire it. For most integrated telecom companies around the world, an important benchmark would be what percentage of your assets or, more important, revenues and profits, are coming from wireless. That's part of the recombination of Sprint, which exceeds 40% of its total revenues from wireless services. We truly believe it was part of the high premium ($41 billion plus) that Cingular Wireless - which is owned by BellSouth (BLS).

TWST: Seth, do you see some pull in that direction?

Mr. Potter: Yes, I do. As it pertains to the companies that I'm looking at, WiMAX, Wi-Fi and any deployment of wireless is a benefit for companies that deploy and design these networks. Clearly, demand for sites where the antennas and/or equipment have to be placed should increase. So as I look at it, just the growth of new technology and of wireless (whether it's WiMAX or wireless LANs right now) will benefit the companies that we follow.

For a copy of this complete issue, call (212)-952-7433 or use the web at http://www.twst.com/info/info932.htm .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800-246-7673

http://biz.yahoo.com/twst/040611/way400.html