New Office Manager and Qualcomm Update
I am pleased to introduce you to Rhonda Corn, who is taking over for Lora Smiddy as our new office manager. Lora decided to retire to stay home with her little children, while they are still little. Rhonda joins us from Sutro, where she served as Cashier. I have known her for over five years. She comes to us with both securities expertise and experience in bookkeeping and tax. Lora will be back from time to time when we need temporary help.
I just returned from a visit with Qualcomm, which has received a lot of press lately regarding rumors of a settlement of both intellectual property rights litigation and the disagreement regarding the world third generation wireless communications standards.
The two parties are in discussions as I write. A Wall Street Journal article last Friday said they are close to signing an agreement, settling both the litigation and the standards debate. As of Tuesday morning there is no agreement. Discussions are ongoing. So is the litigation.
In the meantime, time is passing. I believe time is on Qualcomm’s side. In a just concluded meeting of the TABD (Trans-Atlantic Business Dialog), big steps were taken towards working out a standard that the ITU (International Telecommunications Union) can approve as the world-wide 3rd Generation CDMA Standard. (The ITU is the body of the United Nations that grants worldwide telecommunications standards.) The standard can be described as open and as a convergence of proposed standards that would allow upgradeability to CDMA from all legacy wireless standards, including GSM, the current IS-95 CDMA, PDC in Japan, and analog. Those who have read Qualcomm’s position paper on the 3G standard know that openness and convergence were requirements, without which Qualcomm would not grant licenses for the blocking patents it owns.
http://www.qualcomm.com/cdma/tech/3g_5points.shtml. The ETSI (European Telecommunications Standards Institute) stated in an open letter to Representative Philip M. Crane, Chairman of the Subcommittee on Trade, US House of Representatives, dated August 18, 1998, that "ETSI acknowledges that Qualcomm holds CDMA IPRs." http://www.etsi.org/press/ETSIOpenletter180898.htmAn open, converged standard is of great advantage to CDMA wireless system operators and to Qualcomm, because it is somewhat easier and cheaper to gradually upgrade current CDMA to 3rd generation CDMA than to rebuild a GSM network. Ericsson and its GSM associates have proposed a non-open and non-converged 3rd generation CDMA standard because it would force CDMA operators to rebuild their systems, too.
Another important point is that CDMA is growing several times faster than GSM worldwide. If enough time passes, CDMA will be the standard by default.
It looks as though the current trend towards "open and converged" will rule the day. We are very pleased to own the company that developed and owns the business franchise we call CDMA.
Steven L. Re´, CFA
February 23, 1999
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