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TECHNOLOGY BRIEFS

Qualcomm Plans to Sell Handset Business

September 15, 1999|Bloomberg News

Qualcomm Inc., developer of a leading cell phone technology, said it is in talks to sell its phone-making business and may take a charge as it cuts costs. The San Diego-based company said it plans to reach a sale agreement by year's end but didn't name potential buyers. After selling the telephone business, Qualcomm will draw revenue mainly from its chip business and royalties from phone makers that license its code-division multiple access, or CDMA, technology.

A drop in handset prices and parts shortages are making it hard for Qualcomm to compete with Nokia, Motorola and Ericsson, the biggest cell phone makers. Qualcomm also said it expects a profit of 87 cents a share or more in its fiscal fourth quarter, which ends this month. Analysts polled by First Call Corp. expected profit of 88 cents. In the year-earlier period, Qualcomm's net income was $40 million, or a split-adjusted 27 cents a share.

Qualcomm shares rose $17.13 to close at $170.50 on Nasdaq.

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