NEW YORK--Qualcomm Inc. today announced plans to spin off its IC and system software business as a separate company by August 2001. The supplier of code division multiple access (CDMA) wireless phone technology, said the new company--dubbed "Spinco"--will focus on chips and system software for manufacturers of handset and infrastructure systems.
The move is expected to enable San Diego-based Qualcomm to focus on expanding its existing business and develop additional CDMA technologies for convergence of wireless data applications and Internet access.
"The wireless industry is on the verge of its next major growth phase based on wireless Internet access," said Irwin M. Jacobs, chairman and chief executive officer of Qualcomm. "CDMA has been recognized as the preferred technology for third-generation wireless communications due to its unique ability to efficiently support high-quality voice and high-speed data. Both Qualcomm and Spinco are well positioned to further innovate and support the global expansion of wireless communications."
To give Spinco access to technologies for ICs and system software, Qualcomm said it will assign a portion of its patents to the spin-off company without compromising its existing licensing and royalty business. Spinco will then use the patents to gain access to GSM and other technologies by negotiating cross-licenses, according to Qualcomm.
Qualcomm said it will have little or no need for cross-licenses following the spin-off of Spinco since it had previously exited the wireless infrastructure and phone businesses. After the spin-off next year, Qualcomm expects to have more than 1,000 patents and patent applications in the U.S. that are either essential or useful for existing and all proposed CDMA standards. Qualcomm promised to continue enforcing its patents worldwide after the spin-off in 2001.