|
Qualcomm sells phones
|
 |
December 22, 1999: 6:22 p.m. ET
Mobile phone company sells consumer phone business to Japanese firm Kyocera
|
NEW YORK (CNNfn) - Qualcomm Inc. announced an agreement Wednesday to sell its consumer phone business to Kyocera Corp., the Japanese electronics and packaging firm.
The news came after the San Diego-based company’s shares fell during the day upon word that Qualcomm would be making an announcement.
Under the deal, Kyocera agreed to buy Qualcomm's consumer phone business, including its phone inventory, manufacturing equipment and customer commitments.
In addition, Kyocera will buy from Qualcomm a majority of the chipsets and systems software for its Code Division Multiple Access (CDMA) cellphones for the next five years.
Qualcomm will take a one-time charge of about $30 million before taxes in the first quarter of fiscal 2000.
Terms of the deal were not disclosed.
"This agreement is intended to further increase the demand for CDMA, the world's fastest-growing wireless technology," said Irwin Mark Jacobs, Qualcomm’s chairman and chief executive officer.
"With this North American business base, and our existing operations in Japan and South Korea, our wireless handset business covers the three largest regional markets for CDMA equipment," said Yasuo Nishiguchi, president of Kyocera Corp, which is based in Kyoto, Japan.
Shares of Qualcomm Inc. tumbled during the day following the announcement that it would hold a news conference at 1:30 p.m. PT (4:30 p.m. ET), "regarding the sale of its phone business."
Traded on Nasdaq, the stock closed down 11-7/16 at 485-7/16.
The drop was unusual for Qualcomm (QCOM), which has racked up double-digit gains almost daily for several weeks.
The company, which holds key patents on next-generation mobile telephone technology, has been the best performer on the Nasdaq this year, rising nearly 2,000 percent from 25-5/8 at the end of 1998.
Qualcomm put its money-losing handset division up for sale in September, saying at the time it had several interested buyers and expected to strike a deal by the end of the year.
Qualcomm sold 1.9 million phones in its fourth quarter and the business rings up about $1.6 billion in sales a year.
In addition to cellphones, chipsets and software, the company produces the popular Eudora e-mail program and has interests in satellite-telephone ventures. 
--from staff and wire reports
|
|
|
|
|
 |
|
