Techs Bounce; Qualcomm Shines

Technology stocks received
a much-needed boost this week from the likes of
Microsoft
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, Motorola
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, and Juniper Networks
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, all of whom
painted rosier
pictures of their
near-term futures than was previously expected. Tech bulls
gave
a collective sigh of relief as the beleaguered Nasdaq launched into a

5% rally Thursday.

Friday’s economic numbers bode well for the tech sector
also, with retail
sales and the
Producer Price Index numbers coming in weaker-than-expected.
The
economy has ground to a halt (we are likely already in recession), and

there seems a far greater threat of deflation
than any whiff whatsoever of
inflation.
Just look at the collapse in energy prices.

Throw in the fears of a currency devaluation in Argentina
(a la the Thai
Baht in 1998),
and you’ve got a global economic scenario only a Fed
Chairman
could love: collapsing world economic growth, massive layoffs and
torpedoed
stock markets around the globe. Why is it that Greenie and Co.
seem
to love to operate right on the edge of calamity?

Liquidity Rising

Whether the Fed raised rates too much (they did) or
whether they waited too
long to
ease (they did), SIX rate cuts (three of a panicky nature) are
pumping
a massive amount of liquidity into the big machine right now.
Continued
economic weakness may even make the case for another 50-basis
point
cut.

The main point, though, is that eventually those rate cuts
will kick in, and
we’ll be off
to the races. Tech can’t help but get caught in the updraft
because
expectations are about as low as they can get. The beneficiaries of

the tech recovery will not include all the
boats, though, so it makes sense
to
continue to search now for the next round’s winners.

Qualcomm Qualifies

One name that jumped out at me this morning was wireless
giant Qualcomm

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. Not only
has it weathered the tech storm relatively well over the
last
year or so, but it also stands to benefit from the decision to have the

Olympics in China. With the announcement that
the summer Olympics will take
place
in Bejing in 2008, China’s long march toward economic liberalization

will likely pick up pace. Since wireless
remains such an integral part of
China’s
telco infrastructure, Qualcomm will likely benefit greatly from
China’s
move toward first-world economic status.

Qualcomm actually has positioned itself well in China with
its core CDMA
(code division
multiple access) wireless technology and its next-generation
3G
(third generation) technology standard. As a matter of fact, Qualcomm has

even opened a research and development
facility in Beijing, China, that is
supposed
to speed introduction of 3G wireless communications in the world’s

most populous country. The 43,000-square-foot
CDMA Development Center is
located
in “China’s Silicon Valley.” The facility can only enhance

Qualcomm’s market position in China.

Nokia Deal And “Telematics”

Qualcomm has also benefited from a recent licensing deal
with phone giant Nokia
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that will incorporate QCOM’s entire 3G technology
line into most
of Nokia’s
products. Nokia agreed to extend its royalty licensing pact from
1992
with Qualcomm for all new wireless infrastructure products and
services.
The agreement was positive enough to garner favorable comments and

an upgrade from First Union Securities.

Another positive for the Qualcomm story is its move into
the potentially
lucrative “telematics”
market which some industry groups believe could
become
a $42 billion market by 2010. (It’s about $1 billion a year now.)

Telematics blends Qualcomm’s wireless technology with
software made for an
automobile
that allows you to drive a talking car with Internet and wireless
access.

Qualcomm has teamed up with Ford Motor
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to back San
Diego-based Wingcast in
its goal
of developing the ability to equip cars with its new wireless
technology
that would allow a driver to access corporate databases, e-mail
and
Internet services. With all the worry about cell phones and driving, the

solution Wingcast would offer would be a
“talking” platform that the user
could
use in a “hands free” manner. Wingcast is working with Oracle
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on the software and database integration
systems the product would use.

By incorporating a Global Positioning Satellite (GPS), the
system could be
used to track
rental cars, monitor the speed limits of truckers, or even tell
you
where to find the local Starbucks. Telematics is just another example of a

new technology market that will greatly
benefit consumers and businesses
alike,
and like most of new technology markets, there will probably be one

or two companies that dominate it. Keep an eye
on Qualcomm.