Press Release

Qualcomm Considering Spin-Off of Operating Company Investments

1998年5月27日SAN DIEGO

Qualcomm products mentioned within this press release are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

Qualcomm Incorporated (NASDAQ: QCOM) today announced that it is considering a transaction in which it would transfer certain of its investments in terrestrial-based wireless telecommunications operating companies to a wholly owned subsidiary of Qualcomm, followed by a spin-off of the subsidiary to its stockholders. Qualcomm may retain up to 20 percent of the new company's shares after the spin-off. Following the spin-off, Qualcomm expects that a public market would exist for the new company's stock.

As part of Qualcomm's strategy of supporting the commercialization and sale of its Code Division Multiple Access (CDMA) products and technology, the Company from time to time enters into strategic alliances with domestic and international emerging wireless telecommunication operating companies. These alliances often involve the investment by Qualcomm of substantial equity in the operating company, as well as a commitment by the operating company to purchase certain CDMA equipment from Qualcomm. In a number of these operating companies, Qualcomm may also assume a significant role in the operations and management of the entity.

Qualcomm believes that, although its strategy has benefited the Company and the advancement of its CDMA technology and products worldwide, spinning off these assets at this time would be in the best interests of its stockholders and would positively impact Qualcomm's earnings in future periods following consummation of the transaction. Without the spin-off, according to applicable accounting rules, Qualcomm would be required to continue recognizing a share of certain of the companies' start-up operating losses and would be limited in its ability to recognize revenues from equipment sales to some of these companies. Most critically, these investments create potential conflicts with customers of the Company's products who compete against such operating companies. Finally, Qualcomm believes that the value of its operating company investments are not fully recognized in the Company's current stock price.

The proposed transaction will likely involve a majority of Qualcomm's investments in terrestrial-based wireless telecommunication operating companies. In support, Qualcomm will make a substantial funding commitment, including but not limited to an up-front cash contribution and financing in the form of lines of credit or otherwise. The distribution of the new company's shares may be a taxable dividend to Qualcomm's stockholders. If taxable, the dividend would equal the lower of 1) the average price per share of the spun-off company's stock on the first day of trading following consummation of the transaction or 2) Qualcomm's accumulated earnings and profits through the end of fiscal 1998 (expected to be approximately four ($4) per Qualcomm share).

Should the spin-off occur, it is anticipated that Harvey P. White, Qualcomm's current president and a member of the Board of Directors of Qualcomm, would resign these positions and would serve as chairman, president and CEO of the newly formed entity. It is further anticipated should the transaction occur that Richard Sulpizio, currently Qualcomm's chief operating officer and executive vice president, would assume the role of president of Qualcomm. The transaction is expected to be completed by the end of September 1998 and is subject to approval by Qualcomm's Board of Directors among others.

Headquartered in San Diego, Qualcomm develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACS® system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, in conjunction with others, the development of the Globalstar low-earth-orbit (LEO) satellite communications system. Other Company products include the Eudora Pro® electronic mail software, ASIC products, and communications equipment and systems for government and commercial customers worldwide. For more information on Qualcomm products and technologies, please visit the Company's web site at http://www.qualcomm.com/.

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including the ability to structure the transaction to positively impact Qualcomm's earnings, the ability to recognize revenue on sales to spun-off companies, the ability to preserve customer relations and avoid conflicts following the spin-off, the impact of the spin-off on Qualcomm's stock price and the tax consequences of the transaction to Qualcomm and its stockholders, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 28, 1997 and most recent Form 10-Q.

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