Qualcomm 2002 Annual Report Download - page 36

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enables our next evolution of capacity enhancements using antenna diversity to
achieve yet another doubling of CDMA voice capacity.
NEW PRODUCTS AND MARKETS
Our Company was an early innovator of wireless data applications and we have
a long track record of working with industry and government on mission-critical
wireless applications involving safety and security. Building on that foundation,
this year our Digital Media division produced the world’s only CDMA handset
that meets government security standards for ensuring the protection of top-
secret communications. QUALCOMM was recently awarded a contract to support
the provisioning of this secure handset in South Korea.
As part of the Homeland Security initiative, QUALCOMM is also participating
with the U.S. Department of Transportation (DOT) in an operational test to
determine the effectiveness of high-tech systems in enhancing security for
transportation of hazardous materials by truck. The 18-month operational test
is part of a DOT program to ensure our nation’s safety against further terrorist
attacks. The U.S. DOT awarded the project to Battelle Memorial Institute.
QUALCOMM is a core member of the team as the technical integrator for the
project, which will test capabilities such as biometric driver verification, off-
route vehicle alerts, stolen vehicle alerts, cargo tampering alerts and remote
vehicle disabling.
QUALCOMM technology is helping address the need for secure wireless voice
and data communications on many fronts. Our industry-leading truck tracking
business now features a growing number of services and products focused on
meeting the needs of customers in new transportation markets including the
less-than-truckload and private fleet markets and the gigantic heavy equip-
ment market. And the anti-hijacking technologies introduced and tested in
Brazil are now being looked at by the U.S. Defense Transportation Tracking
System (DTTS).
OUR STRATEGY FOR THE FUTURE
To help speed the worldwide transition to wireless services based on 3G CDMA,
we are making strategic investments and working closely with operators and
manufacturers around the world. For example, we invested in a U.K.-based
company called Inquam, which is using the 450 MHz frequency band to migrate
networks to CDMA, supporting dispatch and other business applications.
Development of multimode devices that will communicate between all types of
networks and allow for effective roaming between existing second-generation
and third-generation networks around the world has been a major focus for
us. We introduced chipsets and system software this year that will support
development of 3G phones with multimode capabilities for either CDMA2000
or WCDMA/UMTS networks.
We also introduced an alternative for GSM operators to migrate to third-
generation CDMA by overlaying their existing GSM networks with CDMA2000
radio equipment while preserving their investment in systems and equipment.
We named this GSM1x. We continue to explore new areas of opportunity for the
future development of wireless systems and are dedicating engineers in our
own organization to this task as well as investing in smaller companies who
have innovative ideas that will be complementary to our capabilities in
the future.
FINANCIAL PERFORMANCE
QUALCOMM posted GAAP revenues of $3.0 billion in fiscal 2002, a 13 percent
increase over the $2.7 billion posted in fiscal 2001. GAAP reported earnings
were $360 million and EPS was $0.44 in fiscal 2002 compared with a loss of
$578 million (or $0.76 per share) in fiscal 2001.
Pro forma revenues from our core operations were $2.9 billion in 2002, which
was an increase of 9 percent over the year ago period. Pro forma earnings this
year were $794 million or $0.98 per share, an increase of 11 percent compared
to $710 million or $0.88 per share in fiscal 2001. (Pro forma results exclude
IN MANY RESPECTS, QUALCOMM IS
ENERGIZING THE CONSUMER ELECTRONICS
INDUSTRY BY PROVIDING THE ENABLING
TECHNOLOGIES FOR PROLIFERATING
NEW PRODUCTS AND SERVICES THAT
WILL TAKE ADVANTAGE OF TODAY’S HIGH-
SPEED NETWORK DATA CAPABILITIES.