Widcomm Signs Agreement With Leading Japanese Telecom Manufacturer
When we last contacted Qualcomm Inc. regarding its framework agreement with China Unicom, the company said reports the nation’s second largest telephone carrier was rejecting CDMA technology may not be accurate.
Then last week, Qualcomm issued a spate of press releases about new agreements it signed with eight different Chinese manufacturing firms for research and development of CDMA cell phones and infrastructure equipment. The agreements spelled out the licensing of Qualcomm’s technology, with options to possibly manufacture and sell the equipment.
When confronted again with reports that Unicom decided not to build a CDMA-based network for at least two years, a Qualcomm spokeswoman repeated the company line: The company intends to continue to work with the Chinese government and manufacturers to deploy CDMA there.
“These eight agreements are evidence that Chinese manufacturers are interested in participating in the growing CDMA market,” said spokeswoman Diana Baldwin.
While the latest agreements resulted in an upward spike to Qualcomm’s battered stock, some analysts remain unconvinced the Chinese market will adopt CDMA anytime soon, or that Qualcomm will reap millions in revenues from the recent pacts.
Ed Snyder, an analyst with Chase H & Q; in San Francisco, said the supply agreements for potential manufacture don’t mean a thing if the Chinese refuse to build a CDMA-based network to create the market for the handsets and base stations. Currently, China’s primary wireless phone system uses GSM, or global standard for mobile communications.
Qualcomm maintains its technology is superior, provides for a higher capacity of users and is much easier to upgrade to the next generation of equipment, so it’s perfectly suited to a phone-deficient market like China.
While that may be true, the latest agreements don’t necessarily move the company any closer to capturing any part of the market if the nation continues to depend on GSM for wireless telecommunications, said Snyder, who rates the stock as “market perform,” or hold.
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Widcomm Signs With OKI: Widcomm Inc., a private San Diego software developer for indoor wireless communications, signed a software-licensing agreement with OKI Electric Industry Co., a leading Japanese telecommunications manufacturer.
The agreement calls for OKI to use Widcomm’s Bluetooth protocol technology in its chipsets that are used in wireless and Internet telecommunications. The company did not disclose how much in sales the agreement would generate.
Bluetooth is a wireless communication technology that allows mobile phones, PCs and other electronic devices to talk to each other.
In April, Widcomm entered into a supply agreement with Psion Dacom, a British firm, for PC cards that power Bluetooth-equipped PCs.
Also last week, Widcomm said it secured $35 million in a second round of financing, which included investments from Texas Instruments, Alcatel, Conextant, Philips, Psion and Sienna Holdings.
San Diego-based venture capital group Enterprise Partners was an initial investor in Widcomm last year, raising $5.3 million for the start-up that launched in June 1998. Widcomm now has about 80 employees.
Leaping Toward Cricket: Leap Wireless International Inc., the spinoff from Qualcomm, sold its Chilean venture to a Spanish utility company, Endesa S.A., for $300 million in cash.
Leap said it intends to use the funding to roll out its flat rate domestic wireless service called Cricket in 25 cities by 2001. The company said it will also use some of the $900 million the firm raised in February for this purpose.
Endesa is the third-largest utility in the world in terms of market capitalization, and the largest in Latin America.
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Titan Expands In Africa: Titan Corp. agreed to purchase a majority ownership of Ivoire Telecom, a telecommunications provider to eight nations in West Africa, for an undisclosed investment.
The deal comes on the heels of an announcement about a month ago by Titan to launch wireless telecom service in the West African nation of Benin. The nine-year contract with Benin’s national telephone company calls for Leap to receive $60 million plus a share of the company’s profits.
SVI Talking Merger: SVI, a San Diego-based software maker and professional service provider to the retail industry, said it has been having “preliminary discussions” for the purpose of a “business combination” with its largest shareholder, a South African-based software company called Softline Limited. Softline, a 61 percent owner of SVI, is the largest accounting and payroll software vender in South Africa, and one of the largest in Australia.
SVI, which is traded on Amex, has more than 300 employees in offices in the U.S., the U.K., Australia and South Africa. Locally, there are 52 at its headquarters on High Bluff Drive.
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Trade Winds: San Diego Dialogue, a public policy center based at UCSD examining border issues, is looking for nominations for an awards program it has scheduled for Sept. 18 at the Old Globe Theatre. The event, called “A Celebration of Civic Excellence,” is seeking nominees of people who have helped make a difference in improving cross border relations between San Diego and Tijuana.
Send any international news with a San Diego connection to mallen@sdbj.com.
