QUALCOMM INC/DE, S-3, 1999-07-13

QUALCOMM INC/DE
S-3, 1999-07-13
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1999
REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------

QUALCOMM INCORPORATED
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 3663 95-3685934
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

5775 MOREHOUSE DRIVE
SAN DIEGO, CA 92121-1714
(858) 587-1121
(Address, including zip code and telephone number, including area code,
of Registrant's principal executive offices)

---------------

IRWIN MARK JACOBS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
QUALCOMM INCORPORATED
5775 MOREHOUSE DRIVE
SAN DIEGO, CA 92121-1714
(858) 587-1121
(Name, address, including zip code and telephone number,
including area code, of agent for service)

---------------

COPIES TO:
FREDERICK T. MUTO, ESQ. SCOTT N. WOLFE, ESQ.
THOMAS A. COLL, ESQ. DAVID A. HAHN, ESQ.
COOLEY GODWARD LLP LATHAM & WATKINS
4365 EXECUTIVE DRIVE, SUITE 1100 701 B STREET, SUITE 2100
SAN DIEGO, CA 92121 SAN DIEGO, CA 92101-8197
---------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as possible after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

----------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=============================================================================================================
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER SHARE PRICE(2) FEE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value per share(3) 4,600,000 $140.6875 $647,162,500 $179,912
- -------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes 600,000 shares of Common Stock which may be purchased by the
Underwriters to cover over-allotments, if any.

(2) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the amount of the registration fee based on the average of
the high and low prices of the Registrant's Common Stock as reported on
the NASDAQ National Market on July 8, 1999.

(3) Includes associated rights to purchase shares of Series A Junior
Participating Preferred Stock of QUALCOMM Incorporated.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

================================================================================

<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED JULY 13, 1999

PROSPECTUS

4,000,000 SHARES

QUALCOMM INCORPORATED

COMMON STOCK

QUALCOMM's common stock is traded on The Nasdaq National Market under
the symbol "QCOM". On July 9, 1999, the last reported sale price for the common
stock on The Nasdaq National Market was $148.75 per share.

----------------

INVESTING IN THE COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.

----------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C>
Public offering price................................... $ $
Underwriting discounts and commissions.................. $ $
Proceeds to QUALCOMM.................................... $ $
</TABLE>

We have granted the underwriters a 30-day option to purchase up to an additional
600,000 shares of common stock to cover over-allotments.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The underwriters expect to deliver the shares on or about July __, 1999.

---------------------------
Joint Book-Running Managers

LEHMAN BROTHERS GOLDMAN, SACHS & CO.

_________, 1999

<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information.................................. 1
Disclosure Regarding Forward-Looking Statements...................... 1
The Company.......................................................... 3
The Offering......................................................... 3
Use of Proceeds...................................................... 3
Risk Factors......................................................... 4
Underwriting......................................................... 13
Legal Matters........................................................ 14
Experts.............................................................. 14
</TABLE>

Unless the context requires otherwise, references in this prospectus to
"we," "us," "our" and "QUALCOMM" refer to QUALCOMM Incorporated and its
wholly-owned subsidiaries.

<PAGE> 4

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). You can inspect and copy these reports, proxy statements and
other information at the public reference facilities of the Commission, in Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center,
Suite 1300, New York, New York 10048; and Suite 1400, Citicorp Center, 500 W.
Madison Street, Chicago, Illinois 60661-2511. You can also obtain copies of
these materials from the public reference section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. The Commission also maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission (http://www.sec.gov). You can inspect reports
and other information we file at the office of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.

We have filed a registration statement and related exhibits with the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
The registration statement contains additional information about us and our
common stock. You may inspect the registration statement and exhibits without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and you may obtain copies from the Commission at prescribed rates.

The Commission allows us to "incorporate by reference" the information
we file with it, which means that we can disclose important information to you
by referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
Commission will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the Commission
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"):

o Annual Report on Form 10-K for the year ended September 30, 1998
(including information specifically incorporated by reference
into our Form 10-K from the Proxy Statement for our 1999 Annual
Meeting of Stockholders);

o Quarterly Reports on Form 10-Q for the quarters ended December
27, 1998 and March 28, 1999;

o Current Report on Form 8-K dated May 24, 1999;

o Description of our common stock contained in our registration
statement on Form 8-A filed with the Commission on September 12,
1991; and

o All documents filed by us with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before
the offering of the common stock offered hereby is completed
(other than those portions of such documents described in
paragraphs (i), (k), and (l) of Item 402 of Regulation S-K
promulgated by the Commission).

You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:

Investor Relations
QUALCOMM Incorporated
5775 Morehouse Drive
San Diego, California 92121-1714
Telephone: (858) 658-4813

You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or any sale of common stock.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including the documents that we incorporate by
reference, contains forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. Any statements about
our expectations, beliefs, plans, objectives, assumptions or future events or
performance are not

1.
<PAGE> 5

historical facts and may be forward-looking. These statements are often, but not
always, made through the use of words or phrases such as "anticipate,"
"estimate," "plans," "projects," "continuing," "ongoing," "expects," "management
believes," "the Company believes," "the Company intends," "we believe," "we
intend" and similar words or phrases. Accordingly, these statements involve
estimates, assumptions and uncertainties which could cause actual results to
differ materially from those expressed in them. Any forward-looking statements
are qualified in their entirety by reference to the factors discussed throughout
this prospectus. Among the key factors that could cause actual results to differ
materially from the forward-looking statements:

o risks that any decline in the rate of growth in the CDMA
subscriber population will decrease;

o developments in current or future litigation;

o timely product development;

o our ability to successfully manufacture significant quantities
of CDMA or other equipment on a timely and profitable basis;

o risks relating to customer receivables and performance
guarantees;

o risks associated with timing and receipt of license fees and
royalties;

o strategic opportunities or acquisitions that we pursue;

o changes in economic conditions of the various markets we serve;

o risks associated with our international business activities;

o issues arising from addressing year 2000 information technology
issues; and

o the availability and terms of financing.

Because the risk factors referred to above, as well as the risk factors
beginning on page 4 of this prospectus, could cause actual results or outcomes
to differ materially from those expressed in any forward-looking statements made
by us or on behalf of the Company, you should not place undue reliance on any
such forward-looking statements. Further, any forward-looking statement speaks
only as of the date on which it is made, and we undertake no obligation to
update any forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for us to predict which will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.

2.
<PAGE> 6
THE COMPANY

We are a leading provider of digital wireless communications products,
technologies and services. We design, develop, manufacture and market wireless
communications and subscriber products and design, develop and market ASIC chips
based on our CDMA technology. We also license and receive royalty payments on
our CDMA technology from major domestic and international telecommunications
equipment suppliers. In addition, we design, manufacture, distribute and operate
products and services for our OmniTRACS system. We also have contracts with
Globalstar to design, develop and manufacture subscriber products and ground
communications systems, and to provide contract development services.

From time to time we consider strategic transactions and alternatives
with the goal of maximizing stockholder value. For example, in September 1998 we
completed the spin off of Leap Wireless International, and in May 1999 we
completed the sale of our infrastructure products division to Ericsson. We will
continue to evaluate additional potential strategic transactions and
alternatives which we believe may enhance stockholder value. These additional
potential transactions may include a variety of different structures, including
spin offs, strategic partnerships, joint ventures, restructurings, divestitures
and business combinations.

Standard & Poor's, a division of The McGraw Hill Companies, Inc., or
S&P, has announced that, effective as of July 21, 1999, it plans to include the
common stock in the Standard & Poor's Corporation 500 Composite Stock Price
Index, or the S&P 500 Index, which is composed of 500 common stocks that S&P
selects. Shares offered by this prospectus will be offered primarily to index
funds whose portfolios are primarily based on stocks included in the S&P 500
Index.

Our principal executive offices are located at 5775 Morehouse Drive, San
Diego, California 92121-1714, and our telephone number is (858) 587-1121. Our
website is located at http://www.qualcomm.com. Information contained on our
website is not part of this prospectus.

THE OFFERING

<TABLE>
<S> <C>
Common stock offered by QUALCOMM....................... 4,000,000 shares(1)

Common stock to be outstanding after the offering...... __________ shares(2)

Use of proceeds........................................ Working capital and general
corporate purposes. See "Use
of Proceeds."

Nasdaq National Market symbol.......................... QCOM
</TABLE>

- ----------

(1) Assumes the underwriters' over-allotment option to purchase 600,000
shares is not exercised. See "Underwriting."

(2) Based upon shares outstanding as of July __, 1999 (assuming no exercise
of options after July __, 1999). Excludes _________ shares of common
stock reserved for issuance pursuant to QUALCOMM's employee benefit
plans, under which options to purchase ________ shares of common stock
were outstanding as of July __, 1999.

USE OF PROCEEDS

The net proceeds we will receive from the sale of 4,000,000 shares of
common stock offered by us at the public offering price of $____ and after
deducting the underwriting discounts and commissions and offering expenses
payable by us will be approximately $____ million (or $____ million if the
underwriters' over-allotment option is exercised in full).

We intend to use the proceeds of this offering primarily for working
capital and general corporate purposes. Pending such uses, we expect to invest
the net proceeds in short-term, interest-bearing, investment grade securities.

3.
<PAGE> 7

RISK FACTORS

This offering involves a high degree of risk. You should carefully
consider the following information about these risks, as well as the other
information contained or incorporated by reference in this prospectus, before
you decide to buy any of our common stock.

Except for historical information, the information contained in this
prospectus and in our SEC reports are "forward looking" statements about our
expected future business and performance. Our actual operating results and
financial performance may prove to be very different from what we might have
predicted as of the date of this prospectus. The risks described below address
some of the factors that may affect our future operating results and financial
performance.

OUR OPERATING RESULTS ARE DIFFICULT TO FORECAST AND MAY BE ADVERSELY AFFECTED BY
MANY FACTORS.

Although we have experienced an increase in both revenues and
profitability over the last several years, we have experienced and may continue
to experience quarterly variability in operating results. As a result, we cannot
assure you that we will be able to sustain profitability on a quarterly or
annual basis in the future. Our future results will depend in part on the
following factors:

o the continued successful implementation of CDMA technology and
products;

o our ability to successfully manufacture, market and/or sell
commercial-scale quantities of CDMA subscriber products, ASICs
and other products on a timely and profitable basis both
domestically and in international markets;

o the timing of introduction of products or product enhancements
by us or our competitors;

o the timing and magnitude of CDMA licensing fees and royalties;

o currency and economic fluctuations in foreign markets and other
factors affecting our international sales;

o bad debt provisions and/or our inability to recognize revenues
associated with our vendor financing programs;

o our recognition of start-up operating losses, impairment charges
and/or the inability to recognize revenues and earnings
associated with our investments in emerging wireless
telecommunications operating companies;

o our ability to meet any applicable performance guarantees;

o the continued success of OmniTRACS; and

o the continuation of the Globalstar development and production
contracts.

IF WE ARE UNABLE TO MANAGE GROWTH IN OUR BUSINESS, OUR BUSINESS WILL SUFFER.

We have experienced and continue to experience rapid domestic and
international growth that has placed, and is expected to continue to place
significant demands on our managerial, operational and financial resources. In
order to manage this growth, we have continued to improve and expand our
management, operational and financial systems and controls, including quality
control and delivery and service capabilities, and will need to continue to do
so. We will also need to continue to expand, train and manage our employee base.
In particular, we must carefully manage production and inventory levels to meet
product demand, new product introductions and product transitions. We cannot
assure you that we will be able to timely and effectively meet such demand and
maintain the quality standards required by our existing and potential customers.

In addition, inaccuracies in our demand forecasts could quickly result
in either insufficient or excessive inventories and disproportionate overhead
expenses. Our international expansion plans will require us to establish, manage
and control operations in countries where we have limited or no operating
experience. Our experience in the expansion of production facilities and
capacity is also limited. In order to accommodate planned growth, we expect that
our operating expenses will continue to increase. We cannot assure you that our
revenues will grow faster than our expenses. We must also continue to hire and
retain qualified technical, engineering and other personnel in the face of
strong demand from our competitors and others for such individuals. If we
ineffectively manage our growth or are unsuccessful in recruiting and retaining
personnel, this could have a material adverse effect on our business, results of
operations, liquidity and financial position.

4.
<PAGE> 8

DELAYS OR DEFECTS IN THE MANUFACTURE OF OUR CDMA PRODUCTS WOULD ADVERSELY AFFECT
OUR BUSINESS.

The manufacture of wireless communications products is a complex and
precise process involving specialized manufacturing and testing equipment and
processes. Demand for, and our revenues from, CDMA wireless communications
subscriber products increased substantially during fiscal 1998. Our
manufacturing capacity is a critical element in meeting this demand. We cannot
assure you that we will be able to effectively meet customer demand in a timely
manner. Factors that could materially and adversely affect our ability to meet
production demand include defects or impurities in the components or materials
used, delays in the delivery of such components or materials, or equipment
failures or other difficulties. We may experience component failures or defects
which could require significant product recalls, reworks and/or repairs which
are not covered by warranty reserves and which could consume a substantial
portion of our manufacturing capacity.

In addition, we cannot assure you that our foreign manufacturing
facilities will be commercially successful given that we will be required to
establish, manage and control operations in countries where we have limited or
no operating experience. Additionally, our business, results of operations,
liquidity and financial position could be materially and adversely affected if
we are unable to manufacture CDMA subscriber products at commercially acceptable
costs and achieve acceptable yields. We also will be impacted negatively if we
expand our manufacturing capacity but are unable to secure sufficient orders for
our CDMA products.

We primarily manufacture our CDMA subscriber products through QPE, a
majority-owned joint venture between us and a subsidiary of Sony Electronics,
Inc. The risks associated with the commercial manufacture of our subscriber
products that we describe in this document also apply to the manufacture of
subscriber products by QPE. Our business, results of operations, liquidity and
financial position could be materially and adversely affected to the extent that
QPE experiences any of the complications, delays or interruptions that we have
described in this document.

OUR MARKETS ARE HIGHLY COMPETITIVE.

There is increasing competition in the wireless telecommunications
industry in the United States and throughout the world. We cannot assure you
that we will be able to successfully compete or that our competitors will not
develop new technologies and products that are more commercially effective than
our own. Many of our competitors have financial, technical, marketing, sales,
and distribution resources greater than ours. In addition, many of these
companies are licensees of our technology and have established market positions,
trade names, trademarks, patents, copyrights, intellectual property rights and
substantial technological capabilities.

Although the implementation of advanced telecommunications services is
in its early stages in many developing countries, we believe competition is
intensifying as businesses and foreign governments realize the market potential
of telecommunications services. Many of our customers currently face competition
from existing telecommunication providers. A number of large American and
European companies and large international telecommunications companies are
actively engaged in programs to develop and commercialize telecommunications
services in both developing and developed countries. In many cases, we also
compete against the landline carriers, including government-owned telephone
companies. In some cases, our competition is from government-controlled or
government-supported entities that are, or may in the future be, privatized or
otherwise become more efficient and competitive. In addition, throughout the
world we may face competition with new technologies and services introduced in
the future. Although we intend to employ relatively new technologies, there will
be a continuing competitive threat from even newer technologies that may render
the technologies employed by us obsolete. We also expect that the price we
charge for our products and services in certain regions will decline as
competition intensifies in those markets.

We also compete in the manufacture of CDMA subscriber products and in
the development, design and sale of ASICs. We are facing increasing competition
as more of our licensees introduce CDMA products. Many of our licensees have
longer operating histories and a greater market presence than ours. Our
competitors may devote a significantly greater amount of their financial,
technical, marketing and other resources to aggressively market competitive
communications systems and products or develop and adopt competitive digital
cellular technologies. Likewise, those efforts may materially adversely affect
our business, results of operations, liquidity and financial position.

5.
<PAGE> 9

Moreover, certain equipment providers may offer more competitive pricing and/or
financing terms than we do as a means of gaining access to the wireless markets.

Existing competitors of OmniTRACS are aggressively pricing their
products and services and could continue to do so in the future. In addition,
these competitors are offering new value-added products and services similar in
many cases to those we developed or are developing. Emergence of new
competitors, particularly those offering low cost terrestrial-based products and
current as well as future low-Earth-orbiting satellite-based systems, may impact
margins and intensify competition in new markets.

WE MAY ENGAGE IN STRATEGIC TRANSACTIONS WHICH COULD ADVERSELY AFFECT OUR
BUSINESS.

From time to time we consider strategic transactions and alternatives
with the goal of maximizing stockholder value. For example, in September 1998
we completed the spin off of Leap Wireless International, and in May 1999 we
completed the sale of our infrastructure products division to Ericsson. We will
continue to evaluate additional potential strategic transactions and
alternatives which we believe may enhance stockholder value. These additional
potential transactions may include a variety of different structures, including
spin offs, strategic partnerships, joint ventures, restructurings, divestitures
and business combinations. We cannot assure you that any such transactions will
in fact enhance stockholder value or will not adversely affect our business or
the trading price of our stock.

OUR INTERNATIONAL BUSINESS ACTIVITIES SUBJECT US TO RISKS THAT COULD ADVERSELY
AFFECT OUR BUSINESS.

A significant part of our strategy involves our current and planned
activities in a number of developing nations. We intend to continue to pursue
growth opportunities in international markets. In many international markets,
barriers to entry are created by long-standing relationships between our
potential customers and their equipment providers and protective regulations,
including local content and service requirements. In addition, our pursuit of
such international growth opportunities may require significant investments for
an extended period before we realize returns, if any, on our investments. Our
projects and investments could be adversely affected by:

o reversals or delays in the opening of foreign markets to new
competitors;

o unexpected changes in regulatory requirements;

o export controls, tariffs and other barriers;

o exchange controls;

o currency fluctuations;

o investment policies;

o nationalization, expropriation and limitations on repatriation
of cash;

o social and political risks;

o taxation; and

o other factors, depending on the country in which such
opportunity arises.

Our revenues from international customers as a percentage of total
revenues were approximately as follows in each of the fiscal years presented:

<TABLE>
<CAPTION>
FISCAL YEAR % OF TOTAL REVENUES
----------- -------------------
<S> <C>
1995 20%
1996 36%
1997 30%
1998 34%
</TABLE>

In addition to the general risks associated with our international sales
and operations, we will also be subject to risks specific to the individual
countries in which we do business.

OUR RESULTS OF OPERATIONS MAY BE HARMED BY FOREIGN CURRENCY FLUCTUATIONS.

We are exposed to risk from fluctuations in foreign currency and
interest rates, which could impact our results of operations and financial
condition. Our financing of products and services is generally denominated in
dollars and any significant change in the value of the dollar against the
national currency where we are lending could result in the increase of costs to
the debtors and could restrict the debtors from fulfilling their contractual
obligations. Any devaluation in the local currency relative to the currencies in
which such liabilities are payable could have a material adverse effect on our
business. In some developing countries, including Chile, Mexico, Brazil, and
Russia, significant currency devaluation relative to the U.S. dollar have
occurred and may occur again in the future. In such circumstances, we may
experience economic loss with respect to the collectability of our receivables
and the recoverability of inventories and investments.

We attempt to hedge transactions with non-U.S. customers. However, the
decline in value of the Asia/Pacific currencies, or declines in currency values
in other regions, may, if not reversed, adversely affect our future product
sales. This is because our products may become more expensive to purchase for
local customers doing business in

6.
<PAGE> 10

the countries of the affected currencies. We have been adversely affected by the
Asian economic downturn in fiscal 1998 with regard to ASICs sales, CDMA
royalties and the cancellation of a CDMA handset supply agreement in South
Korea. In addition, certain of our customers in these foreign countries have
encountered or may in the future encounter financial difficulties resulting from
such foreign currency fluctuations. These financial difficulties could restrict
our customers' ability to fulfill their contractual obligations to us.

A DECREASE IN THE DEMAND FOR CDMA SUBSCRIBER AND ASICS PRODUCTS COULD ADVERSELY
AFFECT OUR BUSINESS.

We are a major supplier of CDMA subscriber and ASICs products for
wireless and satellite service providers. In order to generate revenues and
profits from sales of subscriber and ASICs products, we must continue to make
substantial investments and technological innovations, which are subject to a
number of risks and uncertainties. Other digital wireless technologies,
particularly GSM, to date have been more widely adopted than CDMA and we cannot
assure you that wireless service providers will select CDMA for their networks.
Further, there are numerous companies that supply CDMA subscriber and ASICs
products. Many of these companies have substantially greater resources, much
longer manufacturing histories and more established reputations than we do.

Sales of subscriber products internationally are subject to the various
risks associated with doing business outside of the United States. As a result,
subject to the success of international wireless operators, our ability to
generate substantial revenues and profits from international sales of CDMA
subscriber products is uncertain.

Many wireless operators to which we may consider selling are start-up
entities attempting to provide service to markets where current penetration of
wireless service is low and acceptance is uncertain. In addition, these start-up
entities are subject to all the risks inherent in the operation of a new
business, including the ability to obtain adequate financing, manage growth,
attract and retain qualified personnel and secure appropriate third-party
manufacturing and marketing support.

THE LOSS OF ONE OR MORE SIGNIFICANT CUSTOMERS COULD HARM OUR REVENUES.

A significant portion of our CDMA subscriber and ASICs product sales is,
and is expected to continue to be, concentrated with a limited number of
customers. As a result, our performance will depend on relatively large orders
from a limited number of customers. Our performance will also depend on our
ability to gain additional customers within existing and new wireless and
satellite markets. Our loss of any existing customer or our failure to gain
additional customers could have a material adverse effect on our business,
results of operations, liquidity and financial position.

Certain of our contracts provide for performance guarantees to protect
customers against late delivery of our products or a failure to perform. These
performance guarantees generally provide for monetary payments or contract
offsets that accrue at a daily rate based on percentages of the contract value
to the extent the products are not delivered by scheduled delivery dates or the
systems fail to meet specified performance criteria by such dates. We are
dependent in part on the performance of our suppliers and strategic partners to
provide products that are the subject of the guarantees. Thus, our ability to
deliver such products in a timely manner may be outside of our control. If we
are unable to meet our performance obligations, the performance guarantees could
amount to a significant portion of the contract value and would have a material
adverse effect on product margins and our business, results of operations,
liquidity and financial position.

OUR INDUSTRIES ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE, AND WE MUST KEEP PACE
WITH THE CHANGES TO SUCCESSFULLY COMPETE.

The market for our products is characterized by many factors, including:

o rapid technological advances and evolving industry standards;

o changes in customer requirements;

o frequent new products and enhancements; and

o evolving methods of building and operating communications
systems.

The introduction of products embodying new technologies and the
emergence of new industry standards could render our existing products, and
products currently under development, obsolete and unmarketable. In particular,
we have limited experience in high-volume manufacturing techniques and rapid
product cycles inherent in the subscriber products business.

7.
<PAGE> 11

Our future success will depend on our ability to continue to develop and
introduce new products and product enhancements on a timely basis. Our future
success will also depend on our ability to keep pace with technological
developments, satisfy varying customer requirements and achieve market
acceptance. If we fail to anticipate or respond adequately to technological
developments or customer requirements, or experience any significant delays in
product development, introduction or shipment of our products in commercial
quantities, our competitive position could be damaged. This could have a
material adverse effect on our business, results of operations, liquidity and
financial position. In addition, new technological innovations generally require
a substantial investment before they are commercially viable.

IF OUR INDUSTRY DOES NOT ADOPT A SINGLE CDMA STANDARD THAT IS COMPATIBLE WITH
TODAY'S CDMAONE NETWORKS, OUR BUSINESS MAY SUFFER.

Industry participants and the International Telecommunications Union
("ITU") are currently considering a variety of standards which may be utilized
in third generation wireless networks. We are advocating the standardization of
a single, converged CDMA-based third generation standard that accommodates
equally the dominant network standards in use today. We cannot assure you that
we will be successful in promoting the adoption of a single CDMA standard or
that such a standard, if adopted, will be compatible with today's cdmaOne
networks. We strongly believe that our CDMA patent portfolio is applicable to
other CDMA systems that have been proposed as third generation standards. We
have informed standards bodies and the ITU that we hold essential intellectual
property rights for several other third generation proposals based on CDMA.
Further, we intend to vigorously enforce and protect our intellectual property
position against any infringement. However, we cannot assure you that our CDMA
patents will be determined to be applicable to any proposed standard or that we
will be able to redesign our products on a cost-effective and timely basis to
incorporate next generation wireless technology. If the wireless industry adopts
next generation standards which are incompatible with cdmaOne or is determined
not to rely on our intellectual property, this could have a material adverse
effect on our business, results of operations, liquidity and financial position.

WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE, AND SUCH ADDITIONAL FINANCING MAY
NOT BE AVAILABLE.

The design, development, manufacture and marketing of digital wireless
communication products and services are highly capital intensive. In addition,
wireless and satellite systems operators increasingly have required suppliers
like us to arrange or provide long-term financing or provide equity to them as a
condition to obtaining or bidding on projects. In particular we have substantial
funding requirements to Leap Wireless. In May 1999, we closed the sale of our
terrestrial CDMA wireless infrastructure business. The agreement settled our
litigation with Ericsson and provides for cross licensing of intellectual
property rights for all CDMA technologies. Pursuant to the agreement with
Ericsson, we will extend up to $400 million in financing for possible future
sales by Ericsson of cdmaOne or cdma2000 infrastructure equipment and related
services to specific customers in certain geographic areas, including Brazil,
Chile, Russia and Mexico or in other areas selected by Ericsson. These
commitments are subject to the customers meeting certain conditions established
in the financing arrangements and, in most cases, to Ericsson also financing a
portion of these cdmaOne or cdma2000 sales. To the extent that vendor financing
is not repaid to us, it could have a material adverse effect on our business,
results of operations, liquidity and financial position.

We believe we will be required to raise additional funds from a
combination of sources including potential debt or equity issuances. We cannot
assure you that additional financing will be available on reasonable terms or at
all. In addition, our credit facility places restrictions on our ability to
incur additional indebtedness which could adversely affect our ability to raise
additional capital through debt financing.

OUR BUSINESS MAY BE HARMED IF LEAP WIRELESS DOES NOT MEET ITS REPAYMENT
OBLIGATIONS UNDER ITS CREDIT FACILITY WITH US.

In connection with our recent spin-off and distribution to our
stockholders of Leap Wireless common stock, we made a substantial funding
commitment to Leap Wireless in the form of a $265.0 million secured credit
facility. Amounts borrowed under the credit facility will be due and payable
approximately eight years following September 23, 1998. We cannot assure you
that Leap Wireless will be able to meet its payment obligations to us. If Leap
Wireless is unable to meet its payment obligations to us, our business, results
of operations, liquidity and financial position may be materially adversely
affected. Further, Leap Wireless may identify additional investment requirements
or opportunities for which it needs funding and we may choose to participate in
such funding.

THE INADEQUACY OF OUR INTELLECTUAL PROPERTY PROTECTIONS COULD ADVERSELY AFFECT
OUR BUSINESS.

We rely on a combination of patents, copyrights, trade secrets,
trademarks and proprietary information to maintain and enhance our competitive
position. We have been granted over 200 patents and have over 500 patent
applications pending in the U.S. The vast majority of such patents and patent
applications relate to our CDMA digital wireless technology and much of the
remainder of such patents and patent applications relate to our OmniTRACS
products. We also actively pursue patent protection in other countries of
interest to us. We cannot assure you that the pending patent applications will
be granted or that our patents or copyrights will provide adequate protection.

We have entered into license agreements with more than 60
telecommunications manufacturers, pursuant to which we have granted royalty
bearing licenses under certain of our CDMA patents to make and sell CDMA
products. Some of these license agreements allow our licensees to make and sell
CDMA products for third generation CDMA systems. We believe that our CDMA
patent portfolio provides broad coverage and is applicable to any commercially
viable CDMA wireless system, including modes of CDMA recommended for the
proposed single CDMA 3G standard. We have informed standards bodies, including
the ITU, TIA, ETSI and the Association of Radio Industries and Business, that we
hold essential patents for third generation CDMA systems that have been
submitted to such standards bodies. Further, we intend to vigorously enforce
and protect our intellectual property position against any infringement.
However, despite our extensive patent position and the license agreements we
have entered into with Ericsson and others which provide for royalties payable
to us for certain products employing such CDMA standards, there can be no
assurance that our CDMA patents will be determined to be applicable to any
proposed standard. The adoption of next generation CDMA standards, if any,
which are determined not to rely on our patents could have a material adverse
effect on our business, results of operations, liquidity and financial position.

We file applications for patent protection around the world with
respect to a substantial portion of our intellectual properties. A number of
patents that have been issued abroad are being challenged in opposition
proceedings. On December 10, 1998, the Opposition Board of the European Patent
Office revoked our first issued European Patent. We will appeal this decision to
the European Patent Appeals Board, and will vigorously defend our patents around
the world. In general, our license agreements require the payment of royalties
by our licensees which are the same regardless of whether our licensees use one
or more of our licensed patents. We believe that, with the hundreds of patent
applications that we have filed in Europe and elsewhere around the world, we
have and will maintain broad patent coverage for CDMA wireless applications both
in the U.S. and abroad. However, we cannot assure you that we will be successful
in our appeal or that there will not be other unfavorable outcomes to opposition
proceedings, which could adversely affect our ability to protect our
intellectual properties abroad.

8.
<PAGE> 12
Additionally, we cannot assure you that the confidentiality agreements
upon which we rely to protect our trade secrets and proprietary information will
be adequate. The cost of defending our intellectual property has been and may
continue to be significant.

THIRD-PARTY CLAIMS OF INFRINGEMENT OF THEIR INTELLECTUAL PROPERTY COULD
ADVERSELY AFFECT OUR BUSINESS.

From time to time, certain companies may assert exclusive patent,
copyright and other intellectual proprietary rights to technologies that are
claimed to be important to the industry or to us. In addition, from time to time
third parties provide us with copies of their patents relating to wireless
products and components and offer licenses to such technologies. We in turn
evaluate such patents and the advisability of obtaining such licenses. If any of
our products were found to infringe on protected technology, we could be
required to redesign such products, license such technology, and/or pay damages
or other compensation to the infringed party. If we are unable to license
protected technology used in our products or if we were required to redesign
such products, we could be prohibited from making and selling such products.

Ericsson, Motorola and InterDigital have each advised the TIA that they
hold patent rights in technology embodied in IS-95. Lucent and OKI Electric have
claimed patent rights in IS-96. In accordance with TIA guidelines, each company
has confirmed to the TIA that it is willing to grant licenses under its rights
on reasonable and nondiscriminatory terms. In connection with the settlement and
dismissal of our patent litigation with InterDigital, we received, among other
rights, a fully-paid, royalty free license to use and to sublicense the use of
those patents claimed by InterDigital to be essential to IS-95. In May 1999, we
closed the sale of our terrestrial CDMA wireless infrastructure business. The
agreement settled our litigation with Ericsson and provides for cross licensing
of intellectual property rights for all CDMA technologies, including
cdmaOne(TM), WCDMA and cdma2000(TM). We also received rights to sublicense
certain Ericsson patents, including patents asserted in the litigation, to our
Application Specific Integrated Circuits customers.

In addition, a number of third parties have claimed to own patents
essential to various proposed third generation CDMA standards and have committed
to license such patents on a reasonable and nondiscriminatory basis. If we and
other product manufacturers are required to obtain additional licenses and/or
pay royalties to one or more patent holders, this could have a material adverse
effect on the commercial implementation of our CDMA technology or our product
margins or profitability.

We are currently engaged in patent and other infringement litigation
relating to our technology and products. On June 29, 1999, GTE Wireless,
Incorporated filed an action in the United States District Court for the Eastern
District of Virginia asserting that sales of our wireless telephones infringe a
single patent allegedly owned by GTE. Although we cannot assure you that an
unfavorable outcome of the dispute would not adversely affect our results of
operations, liquidity or financial position, we believe the GTE action is
without merit and will vigorously defend the action.

IF GLOBALSTAR AND THE GLOBALSTAR SYSTEM ARE NOT SUCCESSFUL, OUR BUSINESS MAY BE
HARMED.

We have entered into a number of development and manufacturing
contracts involving the Globalstar system. Our development agreement provides
for the design and development of the ground communications stations, known as
gateways, and users terminals of the Globalstar system. The Globalstar system
is still being deployed, and cannot begin commercial operations until at least
32 satellites are working in orbit, the necessary ground equipment and user
terminals are in place and service providers are licensed in the countries to
be served. Satellite launches are risky, without about 15% of attempts ending
in failure. Globalstar has already had one launch failure, and more failures
may occur within the course of its launch campaign. The cost of installing the
Globalstar system has been revised upward from the original estimates, and
further increases are possible. Until the system is fully deployed and tested,
it is not certain that it will perform as designed. Even if the system operates
as it should, there is no certainty that the anticipated market will develop.

Globalstar may need to raise substantial additional funds in order to
operate the system as planned. If the start of service is significantly
delayed, a larger proportion of Globalstar's debt service requirements will
become due before Globalstar has positive cash flow, which will increase the
amount of money Globalstar needs.

The value of our investment in and future business with Globalstar, as
well as our ability to collect outstanding receivables from Globalstar, depends
on the success of Globalstar and the Globalstar system. Globalstar is a
development stage company and has no operating history. From its inception,
Globalstar has incurred net losses and losses are expected to continue at least
until commercial operations of the Globalstar system commence. A substantial
shortfall in meeting Globalstar's capital needs could prevent completion of the
Globalstar system and could adversely affect our results of operations,
liquidity and financial position. In addition, Globalstar can terminate its
development agreement with us if Globalstar abandons its efforts to develop the
Globalstar system.

THE LOSS OF THIRD-PARTY SUPPLIERS COULD ADVERSELY AFFECT OUR BUSINESS.

The products and services we provide are complex and highly technical in
their nature. Accordingly, we rely on the ability of our suppliers to provide
critical parts and sub assemblies that meet our specifications, in a timely
manner. From time to time we have experienced delays in obtaining services and
quantities of specification compliant radio frequency components, plastics,
connectors and other parts to meet demand for our products.

Several of the critical products and services used in our existing and
proposed products, including ASICs, flash memory chips, radio frequency
components and certain custom and semi-custom very large scale integrated
circuits, other sophisticated electronic parts and major subassemblies used in
the OmniTRACS system, are currently available only from single or limited
sources. Our reliance and the reliance of our licensees on sole or limited
source vendors licensees involves risks. These risks include possible shortages
of certain key components, product performance shortfalls, and reduced control
over delivery schedules, manufacturing capability, quality and costs.

9.
<PAGE> 13

Our manufacturing activities may continue to expand internationally. In
certain cases we will be required to identify new local sources, due in part to
foreign regulations governing product content, to supply our international
manufacturing operations. The risks inherent in our ability to locate alternate
suppliers will be complicated by our inexperience in product manufacturing in
those countries. Business disruptions or financial difficulties of a sole or
limited source supplier of any particular component could materially and
adversely impact our operations by increasing the cost of goods sold or reducing
the availability of such components. While we believe that we could obtain
necessary components from other manufacturers, an unanticipated change in the
source of supply of these components could result in significant shipment delays
for our products. These delays could result in us being required to make
performance guarantee payments.

Certain components require an order lead time of six months or longer.
To meet forecasted production levels, we may be required to commit to certain
long lead time items prior to being awarded a production contract. If forecasted
orders are not received, we may be faced with large inventories of slow moving
or unusable parts. This could result in an adverse effect on our business,
results of operations, liquidity and financial position.

OUR BUSINESS DEPENDS ON THE AVAILABILITY OF SATELLITE AND OTHER FACILITIES FOR
OUR OMNITRACS SYSTEM.

Our OmniTRACS system currently operates in the U.S. market on leased
Ku-band satellite transponders. Our data satellite transponder and position
reporting satellite transponder lease runs through 2001. System enhancements
currently under initial deployment should allow for increased utilization of
transponder capacity. Based on results of the system enhancements, we believe
that the U.S. OmniTRACS operations may not require additional transponder
capacity in fiscal 1999. We believe that in the event additional transponder
capacity would be required in fiscal 1999 or in future years, additional
capacity will be available on acceptable terms. However, we cannot assure you
that we will be able to acquire additional transponder capacity on acceptable
terms on a timely basis. If we fail to maintain adequate satellite capacity this
would have a material adverse effect on our business, results of operations,
liquidity and financial position. Our Network Management Facility operations are
subject to the risk that a failure or natural disaster could interrupt the
OmniTRACS service and have a material adverse effect on OmniTRACS' results of
operations. We maintain a fully operational Network Management Facility in Las
Vegas, Nevada as a backup to our primary Network Management Facility in San
Diego, California.

GOVERNMENT REGULATION MAY ADVERSELY AFFECT OUR BUSINESS.

Our products are subject to various Federal Communications Commission
regulations in the U.S. These regulations require that our products meet certain
radio frequency emission standards and not cause unallowable interference to
other services. We are also subject to government regulations and requirements
by local and international standards bodies outside the U.S., where we are less
prominent than local competitors and have less opportunity to participate in the
establishment of regulatory and standards policies. Changes in the regulation of
our activities, including changes in the allocation of available spectrum by the
U.S. Government and other governments, or exclusion of its technology by a
standards body, could have a material adverse effect on our business, results of
operations, liquidity and financial position. We are also subject to state and
federal health, safety and environmental regulations, as well as regulations
related to the handling of and access to classified information.

THE LOSS OF KEY TECHNICAL OR MANAGEMENT PERSONNEL COULD ADVERSELY AFFECT OUR
BUSINESS.

Our success depends in large part upon our ability to retain highly
qualified technical and management personnel. The loss of one or more of these
employees could have a material adverse effect on our business, results of
operations, liquidity and financial position. None of these individuals has an
employment contract with us. Our success also depends upon our ability to
continue to attract and retain highly qualified personnel in all disciplines. We
cannot assure you that we will be successful in hiring or retaining requisite
personnel.

PRODUCT LIABILITY CLAIMS COULD HARM OUR BUSINESS.

Testing, manufacturing, marketing and use of our products entail the
risk of product liability. While we currently have product liability insurance
that we believe is adequate to protect against product liability claims, you
cannot be sure that we will be able to continue to maintain such insurance at a
reasonable cost or in sufficient amounts to protect us against losses due to
product liability. Our inability to maintain insurance at an acceptable cost or
to otherwise protect against potential product liability could prevent or
inhibit the commercialization of our products. In addition, a product liability
claim or recall could have a material adverse effect on our business, results of
operations, liquidity and financial position.

10.
<PAGE> 14

News reports have asserted that power levels associated with hand-held
cellular telephones may pose certain health risks. We are not aware of any study
that has concluded that there are any significant health risks from using
hand-held cellular telephones. If it were determined that electromagnetic waves
carried through the antennas of cellular telephones create a significant health
risk, there could be a material adverse effect on our ability to market and sell
our wireless telephone products. In addition, there may also be certain safety
risks associated with the use of hand-held cellular phones while driving. This
could also have a material adverse effect on our ability to market and sell our
wireless telephones.

OUR BUSINESS MAY BE HARMED BY YEAR 2000 ISSUES.

We believe that our mission critical systems and our wireless
communication products will be Year 2000 compliant by September 1999. However,
we cannot guarantee that these results will be achieved. Specific factors
leading to this uncertainty include failure to identify any problems associated
with our wireless communication products or all susceptible systems,
non-compliance by third parties whose systems and operations impact us, and
other similar uncertainties. A worst case scenario might include one or more of
our products, internal systems, suppliers or customers being non-compliant. An
event such as this could result in a material disruption to our operations.
Specifically, we could experience problems associated with producing and
delivering our wireless communication products or software application, computer
network, manufacturing equipment and telephone communication system failures.
Supply chain and product non-compliance could result in our failure to perform
on contracts, delayed delivery of products to customers and inadequate customer
service. Customer non-compliance could result in delayed payments for products
and services and build up of inventories. Should a worst case scenario occur, it
could, depending on its duration, have a material impact on our business,
results of operations, liquidity and financial position.

OUR STOCKHOLDER RIGHTS PLAN, CERTIFICATE OF INCORPORATION AND DELAWARE LAW COULD
ADVERSELY AFFECT THE PERFORMANCE OF OUR STOCK.

Our certificate of incorporation provides for cumulative voting in the
election of directors. In addition, our certificate of incorporation provides
for a classified board of directors and includes a provision that requires the
approval of holders of at least 66 2/3% of our voting stock as a condition to a
merger or certain other business transactions with, or proposed by, a holder of
15% or more of our voting stock. This approval is not required in cases where
certain of our directors approve the transaction or where certain minimum price
criteria and other procedural requirements are met. Our certificate of
incorporation also requires the approvals of holders of at least 66 2/3% of our
voting stock to amend or change the provisions mentioned relating to the
classified board, cumulative voting or the transaction approval. Finally, our
certificate of incorporation provides that any action required or permitted to
be taken by our stockholders must be effected at a duly called annual or special
meeting rather than by any consent in writing.

The classified board, transaction approval and other charter provisions
may discourage certain types of transactions involving an actual or potential
change in our control. These provisions may also discourage certain types of
transactions in which our stockholders might otherwise receive a premium for
their shares over then current market prices and may limit our stockholders'
ability to approve transactions that they may deem to be in their best
interests.

Further, we have distributed a dividend of one right for each
outstanding share of our common stock pursuant to the terms of our preferred
share purchase rights plan. In the event holders of our trust convertible
preferred securities convert those securities into shares of our common stock,
each of those shares will also be granted a right. These rights will cause
substantial dilution to the ownership of a person or group that attempts to
acquire us on terms not approved by our board of directors and may have the
effect of deterring hostile takeover attempts. In addition, our board of
directors has the authority to fix the rights and preferences of and issue
shares of preferred stock. This right may have the effect of delaying or
preventing a change in our control without action by our stockholders.

OUR STOCK PRICE IS VOLATILE.

The stock market in general, and the stock prices of technology-based
companies in particular, have experienced extreme volatility that often has been
unrelated to the operating performance of any specific public companies. The
market price of our common stock has fluctuated in the past and is likely to
fluctuate in the future as well. Factors that may have significant impact on our
market price of our stock include:

o future announcements concerning us or our competitors, including
the selection of wireless technology by cellular, PCS and WLL
service providers and the timing of roll-out of those systems;

11.
<PAGE> 15

o receipt of substantial orders for subscriber and ASIC's
products;

o quality deficiencies in services or products;

o results of technological innovations;

o new commercial products;

o changes in recommendations of securities analysts;

o government regulations; and

o proprietary rights or product or patent litigation.

Our future earnings and stock price may be subject to significant
volatility, particularly on a quarterly basis. Shortfalls in our revenues or
earnings in any given period relative to the levels expected by securities
analysts could immediately, significantly and adversely affect the trading price
of our common stock.

12.
<PAGE> 16

UNDERWRITING

Under the underwriting agreement, which is filed as an exhibit to the
registration statement relating to this prospectus, each underwriter named below
has severally agreed to purchase from us the number of shares of common stock
shown opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
UNDERWRITERS COMMON STOCK
------------ ------------
<S> <C>
Lehman Brothers Inc.
Goldman, Sachs & Co.

Total.......................................... 4,000,000
==================
</TABLE>

The underwriting agreement provides that the underwriters' obligations
to purchase shares of common stock depend on the satisfaction of the conditions
contained in the underwriting agreement, and that if any of the shares of common
stock are purchased by the underwriters under the underwriting agreement, then
all of the shares of common stock which the underwriters have agreed to purchase
under the underwriting agreement must be purchased. The conditions contained in
the underwriting agreement include the requirement that the representations and
warranties made by us to the underwriters are true, that there is no material
change in the financial markets and that we deliver to the underwriters
customary closing documents.

The following table summarizes the compensation to be paid to the
underwriters by us and the expenses payable by us.

<TABLE>
<CAPTION>
TOTAL
------------------------------
WITHOUT WITH
PER SHARE OVER-ALLOTMENT OVER-ALLOTMENT
--------- -------------- --------------
<S> <C> <C> <C>
Underwriting discounts and commissions paid by us .. $ $ $

Expenses paid by us................................. $ $ $
</TABLE>

The representatives have advised us that the underwriters propose to
offer the shares of common stock to purchasers in one or more transactions
(which may involve block transactions) on the Nasdaq National Market or
otherwise. The distribution of the common stock also may be effected from time
to time in special offerings, exchange distributions or secondary distributions
pursuant to and in accordance with the rules of the Nasdaq National Market, in
the over-the-counter market, in negotiated transactions, through the writing of
options on the common stock (whether such options are listed on an option
exchange or otherwise), or in a combination of such methods at prevailing market
prices or at negotiated prices. The underwriters may effect such transactions by
selling shares to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters or
the purchasers of the common stock for whom they may act as agents or to whom
they may sell as principal.

In connection with the sale of the shares of common stock, the
underwriters will receive compensation in the form of commissions or discounts
and may receive compensation from purchasers of the shares of common stock for
whom they may act as agent or to whom they may sell as principal in the form of
commissions or discounts, in each case in amounts which will not exceed those
customary in the types of transactions involved. The underwriters and dealers
that participate in the distribution of the shares of common stock may be deemed
to be "underwriters"

13.
<PAGE> 17

within the meaning of that term under the Securities Act of 1933, as amended,
and any discounts received by them from us and any compensation received by them
on resale of the shares of common stock by them may be deemed to be underwriting
discounts and commissions under the Securities Act.

We have granted to the underwriters an option to purchase up to an
aggregate of 600,000 additional shares of common stock, exercisable solely to
cover over-allotments, if any, at the public offering price, less the
underwriting discounts and commissions shown on the cover page of this
prospectus. The underwriters may exercise this option at any time until 30 days
after the date of the underwriting agreement. If this option is exercised, each
underwriter will be committed, so long as the conditions of the underwriting
agreement are satisfied, to purchase a number of additional shares of common
stock proportionate to the underwriter's initial commitment as indicated in the
preceding table and we will be obligated, under the over-allotment option, to
sell the shares of common stock to the underwriters.

We have agreed to indemnify the underwriters against liabilities,
including liabilities under the Securities Act and liabilities arising from
breaches of the representations and warranties contained in the underwriting
agreement, and to contribute to payments underwriters may be required to make
for these liabilities.

From time to time, Lehman Brothers, Inc. or its affiliates have
provided, and may continue to provide, financial advisory services to us.

LEGAL MATTERS

The validity of the shares of common stock being sold in this offering
and other legal matters relating to the offering will be passed upon for us by
Cooley Godward LLP, San Diego, California. Certain legal matters relating to the
offering will be passed upon for the underwriters by Latham & Watkins, San
Diego, California.

EXPERTS

The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K of QUALCOMM Incorporated for the
year ended September 30, 1998, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

14.
<PAGE> 18

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses payable by the Registrant in
connection with the sale of the Securities being registered. All the amounts
shown are estimates except for the SEC registration fee and the Nasdaq National
Market listing fee.

<TABLE>
<S> <C>
SEC Registration fee............................. $179,912
NASD filing fee.................................. 30,500
Nasdaq National Market listing fee............... 17,500
Legal fees and expenses.......................... 100,000
Blue sky qualification fees and expenses ........ 5,000
Accounting fees and expenses..................... 50,000
Miscellaneous.................................... 67,088
--------
Total.................................... $450,000
========

</TABLE>

ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.

Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act of 1933, as amended.

The Registrant's Bylaws provide that the Registrant will indemnify its
directors and executive officers and may indemnify its other officers, employees
and other agents to the fullest extent permitted by Delaware law. The Registrant
believes that indemnification under its Bylaws covers at least negligence and
gross negligence by indemnified parties, and may require the Registrant to
advance litigation expenses in the case of stockholder derivative actions or
other actions, against and undertaking by the indemnified party to repay such
advances if it is ultimately determined that the indemnified party is not
entitled to indemnification.

In addition, the Registrant's Certificate of Incorporation provides
that, pursuant to Delaware law, its directors shall not be liable for monetary
damages for breach of the directors' fiduciary duty of care to the Registrant
and its stockholders. This provision in the Certificate of Incorporation does
not eliminate the duty of care, and in appropriate circumstances equitable
remedies such as injunctive or other forms of nonmonetary relief will remain
available under Delaware law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are unlawful under Delaware law. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities laws or state or federal environmental laws.

The Registrant has entered into separate indemnification agreements with
its directors. These agreements may require the Registrant, among other things,
to indemnify the directors against certain liabilities that may arise by reason
of their status or service as directors (other than liabilities arising from
willful misconduct of a culpable nature), to advance their expenses incurred as
a result of any proceeding against them as to which they could be indemnified
and to obtain directors' insurance if available on reasonable terms.

The Registrant maintains insurance policies covering officers and
directors under which the insurers agree to pay, subject to certain exclusions,
including certain violations of securities laws, for any claim made against the

II-1
<PAGE> 19

directors and officers of the Registrant for a wrongful act that they may become
legally obligated to pay or for which the Registrant is required to indemnify
the officers or directors. The policies have limits of up to $75,000,000 in the
aggregate, subject to retentions of up to $300,000 in the aggregate. The
Registrant believes that its Certificate of Incorporation and Bylaw provisions,
indemnification agreements and insurance policies are necessary to attract and
retain qualified persons as directors and officers.

At present, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Registrant as to which
indemnification is being sought nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification by any director,
officer, employee or other agent.

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
1.1 Form of underwriting agreement.*

4.1 Certificate of Trust of QUALCOMM Financial Trust I, filed with
the Delaware Secretary of State on February 7, 1997.(1)

4.2 Declaration of Trust of QUALCOMM Financial Trust I, dated as of
February 7, 1997, among QUALCOMM Incorporated, as Sponsor,
Wilmington Trust Company, as Delaware Trustee and Property
Trustee, and Irwin Mark Jacobs, Harvey P. White, and Anthony
Thornley, as Regular Trustees.(1)

4.3 Amended and Restated Declaration of Trust of QUALCOMM Financial
Trust I, dated as of February 35, 1997, among QUALCOMM
Incorporated, as Sponsor, Wilmington Trust Company, as Delaware
Trustee and Property Trustee, and Irwin Mark Jacobs, Harvey P.
White, and Anthony Thornley, as Regular Trustees.(1)

4.4 Indenture for the 5-3/4% Convertible Subordinated Debt
Securities, dated as of February 25, 1997, among QUALCOMM
Incorporated and Wilmington Trust company, as Indenture
Trustee.(1)

4.5 Form of 5-3/4% Trust Convertible Preferred Securities (Included
in Annex 1 to Exhibit 4.3 above).(1)

4.6 Form of 5-3/4% Convertible Subordinated Debt Securities
(Included in Annex 1 to Exhibit 4.3 above).(1)

4.7 Preferred Securities Guarantee Agreement, dated as of February
25, 1997, between QUALCOMM Incorporated, as Guarantor, and
Wilmington Trust Company, as Guarantee Trustee.(1)

5.1 Opinion of Cooley Godward LLP.

23.1 Consent of PricewaterhouseCoopers LLP.

23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.

24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>

- ----------

* To be filed by amendment.

(1) Filed as an exhibit to the Registrant's Registration Statement on Form
S-3 (No. 333-26069) or amendments thereto and incorporated herein by
reference.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and executive officers of the Registrant
pursuant to provisions described in Item 15 or otherwise, the Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director or executive officer of the

II-2
<PAGE> 20

Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director or executive officer in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

The undersigned Registrant hereby undertakes:

(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;

(2) (i) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective;

(ii) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof;

(3) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.

II-3
<PAGE> 21

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized on July
12, 1999

QUALCOMM Incorporated

By /s/ IRWIN MARK JACOBS
--------------------------------------
Irwin Mark Jacobs
Chief Executive Officer and Chairman

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Irwin Mark Jacobs and Richard Sulpizio,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming that all said attorneys-in-fact and agents, or any of them or their
or his substitute or substituted, may lawfully do or cause to be done by virtue
thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934,
this Registration Statement has been signed below by the following persons on
behalf of Registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Irwin Mark Jacobs Chief Executive Officer and Chairman July 12, 1999
- ----------------------------------- of the Board (Principal Executive
Irwin Mark Jacobs Officer)

/s/ Andrew J. Viterbi Vice Chairman July 12, 1999
- ----------------------------------
Andrew J. Viterbi

/s/ Anthony S. Thornley Executive Senior Vice President, Chief July 12, 1999
- ---------------------------------- Financial Officer (Principal Financial
Anthony S. Thornley and Accounting Officer)

/s/ Richard C. Atkinson Director July 12, 1999
- ----------------------------------
Richard C. Atkinson

Director
- ----------------------------------
Adelia A. Coffman

Director
- ----------------------------------
Diana Lady Dougan

/s/ Neil Kadisha Director July 12, 1999
- ----------------------------------
Neil Kadisha

/s/ Robert E. Kahn Director July 12, 1999
- ----------------------------------
Robert E. Kahn

/s/ Jerome S. Katzin Director July 12, 1999
- ----------------------------------
Jerome S. Katzin

/s/ Duane A. Nelles Director July 12, 1999
- ----------------------------------
Duane A. Nelles
</TABLE>

II-4
<PAGE> 22

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>

/s/ Peter M. Sacerdote Director July 12, 1999
- ----------------------------------
Peter M. Sacerdote

/s/ Frank Savage Director July 12, 1999
- ----------------------------------
Frank Savage

Director
- ----------------------------------
Brent Scowcroft

/s/ Marc I. Stern Director July 12, 1999
- ----------------------------------
Marc I. Stern
</TABLE>

II-5
<PAGE> 23

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<S> <C>
1.1 Form of underwriting agreement.*

4.1 Certificate of Trust of QUALCOMM Financial Trust I, filed with
the Delaware Secretary of State on February 7, 1997.(1)

4.4 Indenture for the 5-3/4% Convertible Subordinated Debt
Securities, dated as of February 25, 1997, among QUALCOMM
Incorporated and Wilmington Trust company, as Indenture
Trustee.(1)

4.5 Form of 5-3/4% Trust Convertible Preferred Securities (Included
in Annex 1 to Exhibit 4.3 above).(1)

4.6 Form of 5-3/4% Convertible Subordinated Debt Securities
(Included in Annex 1 to Exhibit 4.3 above).(1)

4.7 Preferred Securities Guarantee Agreement, dated as of February
25, 1997, between QUALCOMM Incorporated, as Guarantor, and
Wilmington Trust Company, as Guarantee Trustee.(1)

5.1 Opinion of Cooley Godward LLP.

23.1 Consent of PricewaterhouseCoopers LLP.

23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.

24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>

- ----------

* To be filed by amendment.

(1) Filed as an exhibit to the Registrant's Registration Statement on Form
S-3 (No. 333-26069) or amendments thereto and incorporated herein by
reference.

<PAGE> 1

EXHIBIT 5.1

[LETTERHEAD OF COOLEY GODWARD LLP]

July 12, 1999

QUALCOMM INCORPORATED
5775 Morehouse Drive
San Diego, CA 92121

Ladies and Gentlemen:

You have requested our opinion with respect to certain matters in connection
with the filing by QUALCOMM INCORPORATED, a Delaware corporation (the "Company")
of a Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission, covering an underwritten public offering of
up to 4,600,000 shares of Common Stock (the "Shares").

In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Certificate of
Incorporation and Bylaws, as amended, and the originals or copies certified to
our satisfaction of such records, documents, certificates, memoranda and other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below. We have assumed the genuineness and
authenticity of all documents submitted to us as originals, the conformity to
originals of all documents submitted to us as copies thereof and the due
execution and delivery of all documents where due execution and delivery are a
prerequisite to the effectiveness thereof.

On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when issued and sold in accordance with the Registration
Statement and related Prospectus, will be validly issued, fully paid and
nonassessable.

We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included on the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.

Very truly yours,

COOLEY GODWARD LLP

/s/ Thomas A. Coll
Thomas A. Coll

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated October 30, 1998 relating to the
financial statements and financial statement schedule, which appears in QUALCOMM
Incorporated's Annual Report on Form 10-K for the year ended September 30, 1998.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.

PRICEWATERHOUSECOOPERS LLP

San Diego, California
July 12, 1999