"Qualcomm Inc. said it's ``very close'' to a pact that may lead to the first widespread use
of its cellular-phone technology in China's estimated US$7.8 billion telephone handset market. The news sent Qualcomm shares up as much
as 8.9 percent.
"Talks between the San Diego-based company and China United Telecommunications Corp., the No. 2 Chinese phone company, over licensing of the code division multiple access phone standard
could be concluded after the Chinese New Year holiday, which falls on Feb. 5, Qualcomm officials said. CDMA, developed by Qualcomm,
is the fastest-growing standard for mobile phones.
``It's a package deal involving technology transfer and agreements on intellectual property rights,'' said Leo Zhang, managing director of the China operations for Qualcomm. ``It's not
a simple purchasing agreement.''
"An agreement with China Unicom would allow Qualcomm to challenge mobile networks that use the global system for mobile communications, a standard that's also widely used in Europe.
China's mobile phone market is expected to increase 63 percent this year, to 70 million users by year-end from 43 million in
"Qualcomm shares rose 5 7/16 to 116 at midmorning, after touching 120 7/16. Trading of 10.5 million shares made Qualcomm
the most active stock in U.S. markets. The best-performing member of the Standard & Poor's 500 Index in 1999, Qualcomm shares have lost a third of their value this year.
"Mobile phones sell for 1,000 to 2,000 yuan (US$121-US$241) in China, making it a market worth around US$7.8 billion. By the end of this year, handset sales could be worth as much as US$10 billion if prices stay above 1,000 yuan.