<SUBMISSION>
<ACCESSION-NUMBER>0000936392-01-500076
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>8
<PERIOD>20010401
<FILING-DATE>20010426
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>QUALCOMM INC/DE
<CIK>0000804328
<ASSIGNED-SIC>3663
<IRS-NUMBER>953685934
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-19528
<FILM-NUMBER>1612166
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>5775 MOREHOUSE DR
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121
<PHONE>8585871121
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>5775 MOREHOUSE DR
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a71824e10-q.htm
<DESCRIPTION>FORM 10-Q FOR THE QUARTER ENDED APRIL 1, 2001
<TEXT>

<HTML>
<HEAD>
<TITLE>e10-q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center"><B><FONT size="5">SECURITIES AND EXCHANGE COMMISSION
</FONT></B>

<DIV align="center">
<B>Washington, DC 20549</B>
</DIV>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="center">
<B><FONT size="5">FORM 10-Q
</FONT></B>

<P align="center">
<HR size="1" width="30%" align="center" noshade>

<P align="left"><B>(Mark one)</B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><IMG src="a71824pi5-178.gif"></TD>
	<TD align="left">
	<B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE</B></TD>
</TR>

</TABLE>

<DIV align="left">
<B>SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<P align="center"><B>For the quarterly period ended April&nbsp;1, 2001</B>

<P align="center"><B>OR</B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><IMG src="a71824pi5-110.gif"></TD>
	<TD align="left">
	<B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE</B></TD>
</TR>

</TABLE>

<DIV align="left">
<B>SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<P align="center"><B>For the transition period from <U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U> to <U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>&nbsp;.</B>

<P align="center"><B>Commission File Number 0-19528</B>

<P align="center"><B><FONT size="6">QUALCOMM Incorporated
</FONT></B>

<DIV align="center">
<B><FONT size="2">(Exact name of registrant as specified in its
charter)
</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="center" valign="top"><FONT size="2">
	<B>Delaware<BR>
	(State or other jurisdiction of<BR>
	incorporation or organization)</B></FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top"><FONT size="2">
	<B>95-3685934<BR>
	(I.R.S. Employer<BR>
	Identification No.)</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top"><FONT size="2">
	<B>5775 Morehouse Dr., San Diego, California<BR>
	(Address of principal executive offices)</B></FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top"><FONT size="2">
	<B>92121-1714<BR>
	(Zip Code)</B></FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B>(858)&nbsp;587-1121</B>

<DIV align="center">
<B><FONT size="2">(Registrant&#146;s telephone number, including
area code)
</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant (1)&nbsp;has filed
all reports required to be filed by Section&nbsp;13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding twelve
months (or for such shorter period that the registrant was
required to file such reports) and (2)&nbsp;has been subject to
such filing requirements for the past ninety
days.&nbsp;&nbsp;Yes&nbsp;
<IMG src="a71824pi5-178.gif">&nbsp;&nbsp;No&nbsp;
<IMG src="a71824pi5-110.gif">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of shares outstanding of each of the issuer&#146;s
classes of common stock, as of the close of business on
April&nbsp;23, 2001:

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Class</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number of Shares</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Common Stock $0.0001 per share par value</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">757,273,301</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PART I.FINANCIAL INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">ITEM 2.MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">PART II.OTHER INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">ITEM 1.LEGAL PROCEEDINGS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">ITEM 2.CHANGES IN SECURITIES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">ITEM 3.DEFAULTS UPON SENIOR SECURITIES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009">ITEM 5.OTHER INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K</A></TD></TR>
<TR><TD colspan="9"><A HREF="a71824ex10-39.txt">EXHIBIT 10.39</A></TD></TR>
<TR><TD colspan="9"><A HREF="a71824ex10-40.txt">EXHIBIT 10.40</A></TD></TR>
<TR><TD colspan="9"><A HREF="a71824ex10-41.txt">EXHIBIT 10.41</A></TD></TR>
<TR><TD colspan="9"><A HREF="a71824ex10-42.txt">EXHIBIT 10.42</A></TD></TR>
<TR><TD colspan="9"><A HREF="a71824ex10-43.txt">EXHIBIT 10.43</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>

<P align="center"><B>INDEX</B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Page</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	PART I. FINANCIAL INFORMATION</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;1.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Condensed Consolidated Financial Statements (Unaudited)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Condensed Consolidated Balance Sheets</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Condensed Consolidated Statements of Income</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Condensed Consolidated Statements of Cash Flows</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Notes to Condensed Consolidated Financial Statements</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6&nbsp;&#150;&nbsp;17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;2.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Management&#146;s Discussion and Analysis of Results of
	Operations and Financial Condition</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18&nbsp;&#150;&nbsp;26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;3.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Quantitative and Qualitative Disclosures About Market Risk</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	PART II. OTHER INFORMATION</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;1.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Legal Proceedings</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;2.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Changes in Securities</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;3.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Defaults Upon Senior Securities</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;4.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Submission of Matters to a Vote of Security Holders</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27&nbsp;&#150;&nbsp;28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;5.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Other Information</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Item&nbsp;6.</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Exhibits and Reports on Form&nbsp;8-K</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">2

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PART I.FINANCIAL INFORMATION" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="left"><B>PART I. FINANCIAL INFORMATION</B>

<!-- link2 "ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left"><B>ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)</B>

<P align="center"><B>QUALCOMM Incorporated</B>

<DIV align="center">
<B>CONDENSED CONSOLIDATED BALANCE SHEETS</B>
</DIV>

<DIV align="center">
<B>(In thousands, except per share data)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<DIV align="center">
<B><FONT size="2">ASSETS
</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>September 24,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Current assets:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Cash and cash equivalents</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,114,277</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">716,871</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Marketable securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">810,888</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,055,522</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accounts receivable, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">539,899</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">606,979</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Finance receivables, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,975</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128,515</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Inventories, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,871</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,366</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other current assets</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">134,640</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">136,727</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total current assets</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,891,550</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,729,980</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Property, plant and equipment, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">424,211</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">431,705</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Marketable securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">390,178</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">748,521</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Finance receivables, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">464,768</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">799,404</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Goodwill, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">705,859</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">821,834</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other investments</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">588,577</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">311,015</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other assets</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">429,918</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220,523</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total assets</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,895,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,062,982</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="11" align="center" valign="top"><FONT size="2">
	<B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></FONT></TD>
</TR>

<TR>
	<TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Current liabilities:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Trade accounts payable</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124,845</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112,856</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Payroll and other benefits related liabilities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">120,058</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128,836</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unearned revenue</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51,361</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68,419</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other current liabilities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">127,073</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">162,182</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total current liabilities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">423,337</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">472,293</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other liabilities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">176,914</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,718</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total liabilities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">600,251</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">500,011</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Commitments and contingencies (Notes 3, 5 and 8)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Minority interest in consolidated subsidiaries</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,766</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46,643</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Stockholders&#146; equity:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Preferred stock, $0.0001 par value</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Common stock, $0.0001 par value</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Paid-in capital</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,555,688</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,653,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Retained earnings</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">791,419</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">871,090</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accumulated other comprehensive loss</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(101,139</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,655</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total stockholders&#146; equity</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,246,044</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,516,328</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total liabilities and stockholders&#146; equity</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,895,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,062,982</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
See Notes to Condensed Consolidated Financial Statements.

<P align="center">3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>QUALCOMM Incorporated</B>

<DIV align="center">
<B>CONDENSED CONSOLIDATED STATEMENTS OF INCOME</B>
</DIV>

<DIV align="center">
<B>(In thousands, except per share data)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Three Months Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">713,255</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">727,741</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,397,276</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,847,814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Operating expenses:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Cost of revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">253,497</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">350,396</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">549,418</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">999,144</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Research and development</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">106,253</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,153</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">192,376</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">173,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Selling, general and administrative</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87,272</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">97,398</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167,236</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,174</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Amortization of goodwill and other acquisition-related
	intangible assets</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,374</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,536</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">126,369</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,608</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Purchased in-process technology</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,030</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,030</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Asset impairment and related (credits)&nbsp;charges</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,095</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,151</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">472,683</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,743</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,286</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69,188</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,846</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total operating expenses</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">502,301</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">655,950</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,577,270</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,516,102</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="19"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Operating income (loss)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">210,954</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71,791</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(179,994</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">331,712</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="19"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Interest expense</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,517</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,213</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,085</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,886</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Investment income (expense), net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99,108</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">333,749</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132,421</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">369,996</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Distributions on Trust Convertible Preferred Securities of
	subsidiary trust</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,994</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,039</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,265</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(56,566</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,265</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Income (loss) before income taxes and accounting change</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">308,545</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">399,068</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(379,066</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">681,518</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Income tax (provision) benefit</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(159,473</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(199,352</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">170,580</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(304,683</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Income (loss) before accounting change</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149,072</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,716</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(208,486</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">376,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accounting change, net of tax (Note&nbsp;1)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128,815</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net income (loss)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149,072</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,716</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,671</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">376,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Basic net earnings (loss) per common share:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Income (loss) before accounting change</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.28</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accounting change, net of tax</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net income (loss)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Diluted net earnings (loss) per common share:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Income (loss) before accounting change</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.28</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accounting change, net of tax</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net income (loss)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Shares used in per share calculations:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Basic</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">754,634</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">716,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">752,058</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">690,702</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Diluted</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">806,846</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">801,388</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">752,058</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">796,107</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
See Notes to Condensed Consolidated Financial Statements

<P align="center">4
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>QUALCOMM Incorporated</B>

<DIV align="center">
<B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</B>
</DIV>

<DIV align="center">
<B>(In thousands)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Operating Activities:</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net (loss)&nbsp;income</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,671</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">376,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Depreciation and amortization</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">161,335</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81,394</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Purchased in-process technology</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60,030</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Asset impairment and other non-cash charges and credits</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">570,187</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,673</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Gain on sale of available-for-sale securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(50,772</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(270,061</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net unrealized loss on derivative instruments and securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">295,562</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Minority interest in income of consolidated subsidiaries</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,123</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,614</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Equity in losses of investees</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,465</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,614</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Non-cash income tax (benefit)&nbsp;provision</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(207,505</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">276,666</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accounting change, net of tax</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(128,815</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Increase (decrease)&nbsp;in cash resulting from changes in:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Accounts receivable, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">72,408</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">180,890</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Finance receivables, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(203,987</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(230,035</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Inventories, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(36,822</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(55,365</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other current assets</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,374</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(46,631</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Trade accounts payable</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,851</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(116,785</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Payroll, benefits, and other current liabilities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(43,914</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,397</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unearned revenue</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,618</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,210</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net cash provided by operating activities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">373,437</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">335,652</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Investing Activities:</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Capital expenditures</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(45,734</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(115,104</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Purchases of wireless licenses</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(75,150</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Purchases of available-for-sale securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(523,957</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(528,574</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Proceeds from sale of available-for-sale securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">516,953</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">353,679</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Purchases of held-to-maturity securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(301,323</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(607,996</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Maturities of held-to-maturity securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">674,825</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">652,330</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Issuance of notes receivable</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(122,668</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(199,021</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Collection of notes receivable</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,443</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">228,763</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Proceeds from sale of business</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">216,144</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other investments and acquisitions</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(184,232</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(189,633</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other items, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">550</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,488</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net cash used by investing activities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(46,293</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(195,900</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Financing Activities:</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net borrowings under bank lines of credit</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(112,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net proceeds from issuance of common stock</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73,205</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,059</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other items, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(372</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,458</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net cash provided (used)&nbsp;by financing activities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">72,833</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30,399</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Effect of exchange rate changes on cash</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,571</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,179</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Net increase in cash and cash equivalents</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">397,406</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112,532</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Cash and cash equivalents at beginning of period</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">716,871</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">660,016</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Cash and cash equivalents at end of period</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,114,277</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">772,548</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
See Notes to Condensed Consolidated Financial Statements.

<P align="center">5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>QUALCOMM Incorporated</B>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left"><B>Note 1&nbsp;&#151;&nbsp;Basis of Presentation</B>

<P align="left"><I>Financial Statement Preparation</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying interim condensed consolidated financial
statements have been prepared by QUALCOMM Incorporated (the
Company or QUALCOMM), without audit, in accordance with the
instructions to Form&nbsp;10-Q and, therefore, do not
necessarily include all information and footnotes necessary for
a fair presentation of its consolidated financial position,
results of operations and cash flows in accordance with
accounting principles generally accepted in the United States.
The condensed consolidated balance sheet at September&nbsp;24,
2000 was derived from the audited consolidated balance sheet at
that date which is not presented herein. The Company operates
and reports using a 52-53&nbsp;week fiscal year ending on the
last Sunday in September. As a result, the three month and six
month periods ending April&nbsp;1, 2001 include 13&nbsp;weeks
and 27&nbsp;weeks, respectively, as compared to 13&nbsp;weeks
and 26&nbsp;weeks for the three month and six month periods
ending March&nbsp;26, 2000, respectively.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the opinion of management, the unaudited financial
information for the interim periods presented reflects all
adjustments, which are only normal and recurring, necessary for
a fair presentation. These condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements included in the Company&#146;s Annual
Report on Form&nbsp;10-K for the fiscal year ended
September&nbsp;24, 2000. Operating results for interim periods
are not necessarily indicative of operating results for an
entire fiscal year.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that
affect the reported amounts and the disclosure of contingent
amounts in the Company&#146;s financial statements and the
accompanying notes. Actual results could differ from those
estimates. Certain prior year amounts have been reclassified to
conform to the current year presentation.

<P align="left"><I>Net Earnings Per Common Share</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Basic net earnings per common share are calculated by dividing
net income or loss by the weighted average number of common
shares outstanding during the reporting period. Diluted net
earnings per common share (diluted EPS) for the three months and
six months ended March&nbsp;26, 2000 reflect the potential
dilutive effect, calculated using the treasury stock method, of
69,727,000 and 69,177,000 additional common shares issuable upon
exercise of outstanding stock options, respectively, and the
potential dilutive effect, for the period prior to conversion,
of 14,843,000 and 36,229,000 shares of common stock issuable
upon conversion of Trust Convertible Preferred Securities,
respectively, determined on an if-converted basis. Net income in
the computation of diluted EPS for the three months and six
months ended March&nbsp;26, 2000 is increased by $1&nbsp;million
and $7&nbsp;million, respectively, representing the assumed
savings of distributions, net of taxes, on the Trust Convertible
Preferred Securities. The diluted base for the three months
ended April&nbsp;1, 2001 reflect the potential dilutive effect,
calculated using the treasury stock method, of 52,212,000
additional common shares issuable upon exercise of outstanding
stock options. The diluted share base for the six months ended
April&nbsp;1, 2001 excludes the potential dilutive effect of
54,390,000 incremental shares related to outstanding stock
options, calculated using the treasury stock method, due to
their anti-dilutive effect as a result of the Company&#146;s
loss before accounting change.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Options outstanding during the three months ended April&nbsp;1,
2001 and March 26, 2000 to purchase approximately 10,950,000 and
70,000 shares of common stock, respectively, and options
outstanding during the six months ended April&nbsp;1, 2001 and
March&nbsp;26, 2000 to purchase approximately 9,523,000 and
945,000 shares of common stock, respectively, were not included
in the treasury stock computation of diluted EPS because the
options&#146; exercise price was greater than the average market
price of the common stock during the period and, therefore, the
effect would be anti-dilutive.

<P align="center">6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left"><I>Comprehensive Income</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Components of accumulated other comprehensive loss consist of
the following:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>September 24,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Foreign currency translation</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(42,388</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(25,022</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unrealized (loss)&nbsp;gain on marketable securities, net of
	income taxes</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(58,751</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,367</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(101,139</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,655</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total comprehensive income (loss)&nbsp;consists of the following
(in thousands):

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Three Months Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net income (loss)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149,072</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">199,716</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,671</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">376,835</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other comprehensive loss:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Foreign currency translation</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,841</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,002</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,366</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,136</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unrealized (loss)&nbsp;gain on marketable securities, net of
	income taxes</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,027</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,892</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(118,638</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,239</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Reclassification adjustment for other than temporary losses on
	marketable securities included in net income, net of income taxes</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69,887</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Reclassification adjustment for net realized gains included in
	net income, net of income taxes</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,981</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(160,139</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(30,292</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(161,790</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Reclassification adjustment for losses included in accounting
	change, net of income taxes</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,925</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total other comprehensive loss</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(44,849</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(130,245</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(92,484</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(99,415</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Total comprehensive income (loss)</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,223</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69,471</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(172,155</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">277,420</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The reclassification adjustment for other than temporary losses
on marketable securities results from the recognition of
unrealized losses in the income statement resulting from
declines in the market prices of those securities deemed to be
other than temporary. The reclassification adjustment for net
realized gains results from the recognition of the net realized
gains in the income statement when the marketable securities are
sold. The reclassification adjustment for losses included in the
accounting change results from the recognition of unrealized
losses attributable to derivative instruments as of the
beginning of fiscal 2001 in the income statement as a result of
the implementation of Statement of Financial Accounting
Standards No. 133 (FAS&nbsp;133). Unrealized losses on certain
derivative instruments subject to FAS 133 were previously
recorded as a component of other comprehensive income.

<P align="left"><I>Accounting Change</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company was required to adopt FAS 133, &#147;Accounting for
Derivative Instruments and Hedging Activities&#148; as of the
beginning of fiscal 2001. FAS&nbsp;133 requires certain
derivative instruments to be recorded at fair value. Derivative
instruments held by the Company are comprised of warrants and
other rights to purchase equity interests in certain other
companies related to strategic investment and financing
activities. Such instruments are held for investment, but not
trading, purposes.

<P align="center">7

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company recorded a $129&nbsp;million gain, net of taxes of
$87&nbsp;million, as the cumulative effect of a change in
accounting principle as of the beginning of fiscal 2001. The
cumulative effect of the accounting change related primarily to
the recognition of the unrealized gain on a warrant to purchase
4,500,000 shares of Leap Wireless International, Inc. (Leap
Wireless) common stock issued to the Company in connection with
its spin-off of Leap Wireless in September 1998. Additionally,
the Company recorded $12&nbsp;million in pre-tax unrealized
gains and $148 in pre-tax unrealized losses on derivative
instruments during the three months and six months ended
April&nbsp;1, 2001, respectively, primarily resulting from
changes in the market price of Leap Wireless stock which affect
the fair value of the Leap Wireless warrant. After adoption of
FAS 133, unrealized gains and losses on these derivative
instruments are recorded in the income statement as a component
of investment income (Note 4). The Company exercised a portion
of the Leap Wireless warrant during the first quarter of fiscal
2001. At April&nbsp;1, 2001, the Company has the right to
purchase 3,375,000 shares of Leap Wireless common stock under
the warrant.

<P align="left"><I>Future Accounting Requirements</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 1999, the Securities and Exchange Commission
(SEC)&nbsp;issued Staff Accounting Bulletin No.&nbsp;101
(SAB&nbsp;101), &#147;Revenue Recognition in Financial
Statements.&#148; The SEC staff subsequently amended
SAB&nbsp;101 to provide registrants with additional time to
implement SAB 101. The Company is required to adopt SAB 101 by
the fourth quarter of fiscal 2001, applied retroactively to the
first quarter of fiscal 2001. The Company does not expect the
adoption of SAB&nbsp;101 to have a material effect on its
consolidated financial position, results of operations or cash
flows.

<P align="left"><B>Note 2&nbsp;&#151;&nbsp;Acquisitions</B>

<P align="left"><I>SnapTrack, Inc.</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2000, the Company completed the acquisition of all of
the outstanding capital stock of SnapTrack, Inc. (SnapTrack), a
developer of wireless position location technology, in a
transaction accounted for as a purchase. The purchase price was
approximately $1&nbsp;billion, representing the value of
QUALCOMM shares issued to effect the purchase, the value of
vested and unvested options and warrants exchanged at the
closing date and transaction costs. The condensed consolidated
financial statements include the operating results of SnapTrack
from the date of acquisition. Unaudited pro forma operating
results for the Company, assuming the acquisition of SnapTrack
had been made at the beginning of the period presented, are as
follows (in thousands, except per share data):

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Three</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Six</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Months Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">727,761</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,848,153</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net income</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">154,515</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">268,549</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Basic earnings per common share</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Diluted earnings per common share</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These pro forma results have been prepared for comparative
purposes only and may not be indicative of the results of
operations which actually would have occurred had the
combination been in effect at the beginning of the periods
presented or of future results of operations of the consolidated
entities.

<P align="center">8
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left"><B>Note 3&nbsp;&#151;&nbsp;Composition of Certain Balance Sheet
Captions</B>

<P align="left"><I>Marketable Securities</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Marketable securities are comprised of certificates of deposit,
commercial paper, U.S. government securities, corporate
medium-term notes, mortgage-backed and asset-backed securities
and equity securities that are publicly-traded. Management
determines the appropriate classification of marketable
securities at the time of purchase and reevaluates such
designation as of each balance sheet date. Held-to-maturity
securities are carried at amortized cost, which approximates
fair value. Available-for-sale securities are stated at fair
value as determined by the most recently traded price of each
security at the balance sheet date.

<P align="left"><I>Accounts Receivable</I>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>September 24,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Trade, net of allowance for doubtful accounts of $13,275 and
	$9,610, respectively</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">510,134</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">542,288</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Long-term contracts:</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Billed</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,825</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,059</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unbilled</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,927</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,185</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,013</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,447</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">539,899</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">606,979</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unbilled receivables represent costs and profits recorded in
excess of amounts billable pursuant to contract provisions and
are expected to be realized within one year.

<P align="left"><I>Finance Receivables</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Finance receivables result from arrangements in which the
Company has agreed to provide its customers or certain Code
Division Multiple Access (CDMA) customers of Telefonaktiebolaget
LM&nbsp;Ericsson (Ericsson) with long-term interest bearing debt
financing for the purchase of equipment and/or services. Finance
receivables are comprised as follows:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>September 24,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Finance receivables</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,213,103</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">939,063</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Allowance for doubtful receivables</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(547,360</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,144</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">665,743</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">927,919</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Current maturities, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,975</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128,515</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Noncurrent finance receivables, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">464,768</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">799,404</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At April&nbsp;1, 2001, commitments to extend long-term financing
by QUALCOMM to certain CDMA customers of Ericsson totaled
approximately $587&nbsp;million. The commitment to fund
$400&nbsp;million of this amount expires on November&nbsp;6,
2003. The Company expects to fund the remaining
$187&nbsp;million commitment through fiscal 2007. The financing
commitments are subject to the CDMA customers meeting conditions
prescribed in the financing agreements and, in certain cases, to
Ericsson also financing a portion of such sales and services.
Such financing is generally collateralized by the related
equipment. Commitments represent the estimated amounts to be
financed under these arrangements; actual financing may be in
lesser amounts.

<P align="center">9

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left"><I>Inventories</I>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>September 24,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Raw materials</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,845</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,952</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Work-in-process</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,080</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,370</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Finished goods</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70,946</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,044</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,871</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,366</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><I>Goodwill</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At April&nbsp;1, 2001 and September&nbsp;24, 2000, goodwill is
presented net of $265 million and $144&nbsp;million in
accumulated amortization, respectively.

<P align="left"><B>Note 4&nbsp;&#151; Investment Income (Expense), Net</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investment income (expense) is comprised as follows (in
thousands):

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Three Months Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Interest income</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71,468</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67,605</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">139,890</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109,163</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Net realized gains on marketable securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30,184</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">267,487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,772</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">270,061</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unrealized other than temporary losses on marketable securities</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,538</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(147,166</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unrealized other than temporary loss on equity method investment</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,933</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Change in unrealized gain on derivative instruments</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,864</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(148,396</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Minority interest in income of consolidated subsidiaries</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(895</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(300</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,123</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,614</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Equity in losses of investees</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,975</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,043</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(15,465</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,614</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99,108</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">333,749</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(132,421</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">369,996</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><B>Note 5&nbsp;&#151; Other Investments</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company makes strategic investments in companies that have
developed or are developing innovative wireless data
applications and wireless carriers that promote the worldwide
deployment of CDMA2000 1x/1xEV systems. Investments in corporate
entities with less than a 20% voting interest are generally
accounted for under the cost method. The Company uses the equity
method to account for investments in corporate entities in which
it has a voting interest of 20% to 50% and other than minor to
50% ownership interests in partnerships and limited liability
corporations, or in which it otherwise has the ability to
exercise significant influence. The Company holds warrants to
purchase equity interests in certain other companies related to
its strategic investment and financing activities. Warrants to
purchase equity interests in publicly-traded companies are
accounted for at fair value.

<P align="left"><I>Globalstar LP</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through partnership interests held in certain intermediate
limited partnerships, the Company owns a 6.3% partnership
interest in Globalstar LP (Globalstar), a limited partnership
formed to develop, own and

<P align="center">10
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<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">
operate the Globalstar low-Earth-orbit (LEO)&nbsp;satellite
system utilizing CDMA technology (the Globalstar System). The
Company has contracts with Globalstar to design, develop and
manufacture subscriber products and ground communications
equipment.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;16, 2001, Globalstar announced that, in order to
have sufficient funds available for the continued progress of
its marketing and service activities, it has suspended
indefinitely principal and interest payments on all of its debt,
including its vendor financing obligations. As a result,
Globalstar did not make an approximate $22&nbsp;million payment
for principal and interest due to QUALCOMM on January&nbsp;15,
2001. Globalstar also announced the retention of a financial
adviser to assist in developing future initiatives, including
restructuring Globalstar&#146;s debt, identifying funding
opportunities and pursuing other strategic alternatives. As a
result of these developments, QUALCOMM assessed the
recoverability of all assets and considered probable exposures
related to the Globalstar business. During the first quarter of
fiscal 2001, the Company recorded charges of $48&nbsp;million in
cost of revenues, $481&nbsp;million in asset impairment and
related charges, $10&nbsp;million in investment expense and
$57&nbsp;million in other non-operating charges related
primarily to the impairment of certain assets. During the second
quarter of fiscal 2001, the Company recorded adjustments to
certain reserves related to the Globalstar business, and
accordingly, the net charges recorded by the Company in cost of
revenues and for asset impairment and related charges totaled
$47&nbsp;million and $476 million, respectively, during the six
months ended April&nbsp;1, 2001. At April&nbsp;1, 2001, the
Company has approximately $54&nbsp;million in net assets
remaining, primarily consisting of finance receivables, accounts
receivable, inventory and fixed assets, related to the
Globalstar business. Starting in the first quarter of fiscal
2001, the Company decided to not recognize revenue on business
with Globalstar before cash is received. During the three months
and six months ended April&nbsp;1, 2001, the Company recorded
$15&nbsp;million and $16&nbsp;million in revenue, respectively,
related to cash received from Globalstar.

<P align="left"><I>Wingcast, LLC</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2000, Ford Motor Company and QUALCOMM announced the
creation of a new company, Wingcast, LLC (Wingcast), that will
develop and deliver wireless mobility services, including safety
and security, information and communications, and entertainment
and mobile commerce, into cars and trucks. QUALCOMM committed to
contribute $125&nbsp;million to the initial capital of Wingcast,
of which $75&nbsp;million is payable in cash and
$50&nbsp;million is payable in non-cash consideration. QUALCOMM
may be further committed to fund an additional $75&nbsp;million
in cash upon vehicle manufacturers committing to enable certain
volumes of vehicles to use Wingcast&#146;s services. At
April&nbsp;1, 2001, $63&nbsp;million of the $75&nbsp;million
cash commitment is outstanding, and Wingcast had not met the
performance milestones related to the additional
$75&nbsp;million cash commitment. Performance milestones must be
completed by April 2003 or before Wingcast&#146;s initial public
offering. The Company expects to fund the remaining commitment
through fiscal year 2003.

<P align="left"><I>Inquam Limited</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2000, the Company agreed to invest $200&nbsp;million
in the convertible preferred shares of Inquam Limited (Inquam).
Inquam was formed to acquire, own, develop and manage wireless
telecommunication systems, either directly or indirectly, with
the primary intent of deploying CDMA-based technology. In
addition, the Company advanced $10&nbsp;million under a
promissory note that matures on October&nbsp;31, 2001 and bears
interest at 10%. At April&nbsp;1, 2001, $157&nbsp;million of the
equity funding commitment is outstanding. The Company expects to
fund the remaining commitment through June 2002.

<P align="left"><I>QUALCOMM/ Hansol iV CDMA Fund</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2000, the Company announced the formation of a South
Korean partnership fund, QUALCOMM/ Hansol iV CDMA Fund, with
Hansol&nbsp;i Ventures Co., Ltd. to invest in South Korean
start-up companies engaged in the development and
commercialization of CDMA products to support the adoption of

<P align="center">11
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<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">
CDMA and the use of the wireless Internet. QUALCOMM committed to
contribute approximately $27&nbsp;million to the initial capital
of the fund. At April&nbsp;1, 2001, $13&nbsp;million of the
equity funding commitment is outstanding. The Company expects to
fund the remaining commitment during calendar 2001.

<P align="left"><I>Other</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Funding commitments related to other strategic investments total
$40&nbsp;million at April&nbsp;1, 2001, which the Company
expects to fund through December 2003. Such commitments may be
subject to the investees meeting certain conditions; actual
equity funding may be in lesser amounts.

<P align="left"><B>Note 6&nbsp;&#151; Bank Line of Credit</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company had an unsecured credit facility under which banks
were committed to make up to $400&nbsp;million in revolving
loans to the Company, maturing in March 2001. Effective
January&nbsp;26, 2001, QUALCOMM terminated this facility.

<P align="left"><B>Note 7&nbsp;&#151; Income Taxes</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company currently estimates its annual effective income tax
rate to be approximately 45% for fiscal 2001, compared to 44%
for fiscal 2000. The expected annual effective tax rate for
fiscal 2001 increased primarily due to lower pre-tax earnings
relative to nondeductible charges, offset by lower taxes related
to earnings outside of the United States.

<P align="left"><B>Note 8&nbsp;&#151; Commitments and Contingencies</B>

<P align="left"><I>Litigation</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On or about June&nbsp;5, 1997, Elisra Electronic Systems Ltd.
(Elisra) submitted to the International Chamber of Commerce a
Request for Arbitration of a dispute with the Company based upon
a Development and Supply Agreement (DSA) entered into between
the parties effective November&nbsp;15, 1995, alleging that the
Company wrongfully terminated the DSA, and seeking monetary
damages. The Company thereafter submitted a Reply and
Counterclaim, alleging that Elisra breached the DSA, and seeking
monetary damages. Subsequently, the parties stipulated that the
dispute be heard before an arbitrator under the jurisdiction of
the American Arbitration Association, and to bifurcate the
resolution of liability issues from damage issues. In April,
2001, the Arbitrator ruled in the Company&#146;s favor on
Elisra&#146;s claims and denied the Company&#146;s
counterclaims. While the plaintiffs have asked for modification
of the ruling, the Company anticipates no further proceedings at
this time.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;6, 1999, Thomas Sprague, a former employee of the
Company, filed a putative class action against the Company,
ostensibly on behalf of himself and those of the Company&#146;s
former employees who were offered employment with Ericsson in
conjunction with the sale to Ericsson of certain of the
Company&#146;s infrastructure division assets and liabilities.
The complaint and subsequent amendments, filed in the California
Superior Court in San Diego state several causes of action
against the Company arising primarily out of breaches of the
Company&#146;s 1991 Stock Option plan and upon various allegedly
fraudulent behavior by the Company. On September&nbsp;15, 2000,
the Court certified the case as a class action, and subsequently
approximately 206 individuals in the potential class opted out
of the class. On December&nbsp;8, 2000, the Court granted
summary judgment as to all class members who had not opted out
and who had participated in the Retention Bonus Plan, dismissing
all claims filed on their behalf, leaving approximately 35
plaintiffs remaining in the case. On January&nbsp;19, 2001, the
Court decertified the class action as to all claims except for
plaintiffs&#146; claims based upon alleged breach of the
plaintiffs&#146; stock option agreements. On February&nbsp;23,
2001, the parties stipulated to a settlement of the action for
payment by QUALCOMM of $11&nbsp;million, which is being funded

<P align="center">12

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<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">
by third parties, to the over 800 remaining class members. On
April&nbsp;23, 2001, the Court approved the settlement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;14, 2000, 77 former QUALCOMM employees who had
opted out of the above-referenced Sprague v. QUALCOMM lawsuit
filed a lawsuit against the Company in the District Court for
Boulder County, Colorado, alleging claims for intentional
misrepresentation, nondisclosure and concealment, violation of
C.R.S. Section&nbsp;8-2-104 (obtaining workers by
misrepresentation), breach of contract, breach of the implied
covenant of good faith and fair dealing, promissory estoppel,
negligent misrepresentation, unjust enrichment, violation of
California Labor Code Section&nbsp;970, violation of California
Civil Code Sections&nbsp;1709&nbsp;&#150; 1710, rescission,
violation of California Business&nbsp;&#38; Professions Code
Section&nbsp;17200 and violation of California Civil Code
Section&nbsp;1575. The Company has moved for summary judgment as
to all claims on the grounds that the plaintiffs had executed
releases of claims in favor of the Company. Although there can
be no assurance that an unfavorable outcome of the dispute would
not have a material adverse effect on the Company&#146;s results
of operations, liquidity or financial position, the Company
believes the claims are without merit and will vigorously defend
the action.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;29, 1999, GTE Wireless, Incorporated
(GTE)&nbsp;filed an action in the U.S. District Court for the
Eastern District of Virginia asserting that wireless telephones
sold by the Company infringe a single patent allegedly owned by
GTE. On September&nbsp;15, 1999, the court granted the
Company&#146;s motion to transfer the action to the U.S.
District Court for the Southern District of California. No trial
date is presently set in this case. Although there can be no
assurance that an unfavorable outcome of the dispute would not
have a material adverse effect on the Company&#146;s results of
operations, liquidity or financial position, the Company
believes the action is without merit and will vigorously defend
the action.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;2, 2000, Thomas Durante, James Curley, Curtis
Parker and Joseph Edwards, filed a putative class action against
the Company, ostensibly on behalf of themselves and those former
employees of the Company whose employment was terminated in
April 1999. Virtually all of the purported class of plaintiffs
received severance packages at the time of the termination of
their employment, in exchange for a release of claims, other
than federal age discrimination claims, against the Company. The
complaint was filed in California Superior Court in and for the
County of Los Angeles and purports to state ten causes of action
including breach of contract, age discrimination, violation of
Labor Code Section&nbsp;200, violation of Labor Code
Section&nbsp;970, unfair business practices, intentional
infliction of emotional distress, unjust enrichment, breach of
the covenant of good faith and fair dealing, declaratory relief
and undue influence. The complaint seeks an order accelerating
all unvested stock options for the members of the class. On
June&nbsp;27, 2000, the case was ordered transferred from Los
Angeles County Superior Court to San Diego County Superior
Court. On July&nbsp;3, 2000, the Company removed the case to the
United States District Court for the Southern District of
California, and discovery has commenced. In February, 2001 the
court granted the Company&#146;s motion to dismiss the
plaintiffs&#146; disparate impact age discrimination claims, and
the plaintiffs have moved for reconsideration of that ruling. In
addition, the Company has moved the court to dismiss all claims
asserted by the plaintiffs except for federal age discrimination
claims on the grounds that the releases that they had executed
barred their claims. A hearing on plaintiffs&#146; motion to
certify the case as a class action has been set for later this
year. Although there can be no assurance that an unfavorable
outcome of the dispute would not have a material adverse effect
on the Company&#146;s results of operations, liquidity or
financial position, the Company believes the claims are without
merit and will vigorously defend the action.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;13, 2000, Van May, Ruth Ann Feldman, Jeffrey Alan
MacGuire and Maurice Clark filed a putative class action lawsuit
in San Diego County Superior Court against the Company and
against QUALCOMM Personal Electronics (QPE), ostensibly on
behalf of themselves and other former employees of QPE who were
offered benefits in QPE&#146;s Performance Unit Plan. The
complaint purports to state seven causes of action, including
breach of contract, violation of California Labor Code
Section&nbsp;970, fraud, unfair business practices, unjust
enrichment, breach of the covenant of good faith and fair
dealing and declaratory

<P align="center">13

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<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">
relief. The parties have tentatively agreed to a resolution of
the action in which the plaintiffs will dismiss the action in
exchange for the Company&#146;s agreement not to make malicious
prosecution or attorney fees claims against them.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;13, 2001, approximately 70 former QUALCOMM
employees who had opted out of the above-referenced Sprague v.
QUALCOMM lawsuit filed a lawsuit against the Company in San
Diego County Superior Court alleging breach of contract, fraud,
rescission, specific performance, and work, labor and services
performed. Although there can be no assurance that an
unfavorable outcome of the dispute would not have a material
adverse effect on the Company&#146;s results of operations,
liquidity or financial position, the Company believes the claims
are without merit and will vigorously defend the action.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;30, 2001, Zoltar Satellite Alarm Systems, Inc.
filed suit against the Company and SnapTrack, the Company&#146;s
wholly owned subsidiary, alleging infringement of three patents.
Although there can be no assurance that an unfavorable outcome
of this dispute would not have a material adverse effect on the
Company&#146;s results of operations, liquidity or financial
position, the Company believes the claims are without merit and
will vigorously defend the action.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is engaged in other legal actions arising in the
ordinary course of its business and believes that the ultimate
outcome of these actions will not have a material adverse effect
on its results of operations, liquidity or financial position.

<P align="left"><I>Letters of Credit, Financial Guarantees and Other Financial
Commitments</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;22, 1999 and April&nbsp;25, 2000, the Company
and Pegaso Telecomunicaciones, S.A. de C.V. (Pegaso) executed
commitment letters in which the Company agreed to underwrite up
to $500&nbsp;million of debt financing to Pegaso and its
wholly-owned subsidiary, Pegaso Comunicaciones y Sistemas, a
CDMA wireless operating company in Mexico. The debt financing
will consist of a $250&nbsp;million senior secured facility and
a $250&nbsp;million unsecured facility. The debt facilities are
expected to have final maturities of seven to eight years. In
March 2001, the Company agreed to increase the amount available
under a $315&nbsp;million bridge facility, including capitalized
interest, provided to Pegaso to $409&nbsp;million, including a
$175&nbsp;million guarantee, $185&nbsp;million in funding from
QUALCOMM, and $49&nbsp;million for capitalized interest.
QUALCOMM earns a guarantee fee of 6.25% per annum and interest
at LIBOR plus 6% for the remaining facility. The bridge facility
will be prepaid and cancelled upon funding of the
$250&nbsp;million senior secured facility and the
$250&nbsp;million unsecured facility. At April&nbsp;1, 2001,
$351&nbsp;million is outstanding under the bridge facility, with
$50&nbsp;million remaining to be funded by QUALCOMM and
$8&nbsp;million available for interest capitalization.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2000, the Company and VeloCom Inc., an investor in
CDMA telecommunications operators in Latin America, executed a
Term Loan Agreement in which the Company agreed to provide
$230&nbsp;million of convertible debt financing, including
$30&nbsp;million for capitalized interest. The debt facility has
a three year term and bears interest at 18%. At April&nbsp;1,
2001, $86&nbsp;million is outstanding under this facility.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to these debt financing commitments, the Company has
$72&nbsp;million of letters of credit and $7&nbsp;million of
other financial guarantees and commitments outstanding as of
April&nbsp;1, 2001, none of which are collateralized.

<P align="left"><B>Note 9&nbsp;&#151; Segment Information</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is organized on the basis of products and services.
Reportable segments are as follows: QUALCOMM CDMA Technologies
(QCT) is a leading developer and supplier worldwide of
CDMA-based wireless communication integrated circuits and system
and applications software solutions for voice and data
communications products and services; QUALCOMM Technology
Licensing (QTL) licenses third parties to design, manufacture,
and sell products incorporating the Company&#146;s technologies;
and QUALCOMM

<P align="center">14

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">
Wireless Systems (QWS) designs, manufactures, markets, and
deploys infrastructure and handset products for use in
terrestrial and non-terrestrial CDMA wireless and satellite
networks and provides satellite-based two-way data messaging,
position reporting equipment and services to transportation
companies. The Company sold its terrestrial-based CDMA wireless
consumer phone business, the former operating segment QUALCOMM
Consumer Products (QCP), to Kyocera Wireless Corp. in February
2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company evaluates the performance of its segments based on
earnings before income taxes and accounting change (EBT). EBT
includes the allocation of certain corporate expenses to the
segments, including depreciation and amortization expense
related to unallocated corporate assets. Segment data includes
intersegment revenues.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below presents revenues and EBT for reported segments
(in thousands):

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Reconciling</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>QCT</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>QTL</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>QWS</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Items</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>For the three months ended:</B></FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>April&nbsp;1, 2001</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">363,741</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">229,456</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,613</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,445</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">713,255</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	EBT</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">84,574</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">210,473</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,896</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,398</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">308,545</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>March&nbsp;26, 2000</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">279,186</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167,652</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">188,302</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,601</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">727,741</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	EBT</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89,977</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,423</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83,034</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,634</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">399,068</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="22"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>For the six months ended:</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>April&nbsp;1, 2001</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">693,795</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">452,938</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">187,454</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,089</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,397,276</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	EBT</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">168,345</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">421,270</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,766</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(994,447</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(379,066</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>March&nbsp;26, 2000</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">631,581</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">345,197</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">403,266</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">467,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,847,814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	EBT</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">217,667</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">313,013</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149,181</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,657</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">681,518</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the second quarter of fiscal 2001, management decided
that certain impairment and other charges would not be allocated
to the applicable segments in assessing segment performance and
allocating resources for management reporting purposes. As such,
results for the first quarter of fiscal 2001 have been revised
in the six months ended April&nbsp;1, 2001 to reflect the impact
of this methodology on previously reported first quarter fiscal
2001 segment results. Segment results for the comparable periods
in the prior fiscal year have not been revised as there were no
similar charges allocated to the segments.

<P align="center">15

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reconciling items in the previous table are comprised as follows
(in thousands):

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Three Months Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>April 1,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March 26,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2001</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Revenues</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues from external customers of QCP segment sold</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,492</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">541,856</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Elimination of intersegment revenue</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,007</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(41,951</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(33,840</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(142,055</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Other products</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,452</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34,060</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">96,929</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67,969</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Reconciling items</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25,445</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,601</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,089</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">467,770</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>Earnings before income taxes</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unallocated corporate expenses</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(68,313</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(155,750</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(795,125</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(183,320</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	EBT of QCP segment sold</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(62,676</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(80,222</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unallocated investment (expense)&nbsp;income, net</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,428</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">299,577</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(173,372</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">325,608</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Unallocated interest expense</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,364</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(611</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,634</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,166</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	EBT from other products</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,479</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,636</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,878</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,751</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Distributions on Trust Convertible Preferred Securities of
	subsidiary trust</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,994</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,039</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Intracompany profit</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">330</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,548</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,438</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(42,453</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Reconciling items</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,398</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,634</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(994,447</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,657</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unallocated corporate expenses include $63&nbsp;million and
$125&nbsp;million for amortization of goodwill and other
acquisition-related intangible assets during the three months
and six months ended April&nbsp;1, 2001, respectively, and
$580&nbsp;million related to the Globalstar business
(Note&nbsp;5) and $69&nbsp;million related to an arbitration
decision against the Company during the six months ended
April&nbsp;1, 2001. Unallocated corporate expenses during the
three months and six months ended March&nbsp;26, 2000 include
$56&nbsp;million and $83&nbsp;million, respectively, related to
the sale of the terrestrial-based CDMA wireless consumer phone
business, $60&nbsp;million for in-process technology related to
the SnapTrack acquisition, and $21&nbsp;million for amortization
of goodwill and other acquisition-related intangible assets.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from external customers and intersegment revenues are
as follows (in thousands):

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>QCT</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>QTL</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>QWS</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>For the three months ended:</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>April&nbsp;1, 2001</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues from external customers</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">361,384</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">214,899</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">94,520</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Intersegment revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,357</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,557</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>March&nbsp;26, 2000</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues from external customers</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">257,794</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,575</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">184,820</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Intersegment revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,392</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,077</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,482</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>For the six months ended:</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>April&nbsp;1, 2001</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues from external customers</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">689,887</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">423,828</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">186,632</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Intersegment revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,908</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,110</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">822</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	<B>March&nbsp;26, 2000</B></FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Revenues from external customers</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">543,769</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">294,436</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">399,784</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Intersegment revenues</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87,812</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,761</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,482</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">16
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<DIV align="center">
<B>QUALCOMM Incorporated</B>
</DIV>

<DIV align="center">
<B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)</B>
</DIV>

<DIV align="center">
<B>(Unaudited)</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Segment assets were presented in the Company&#146;s 2000 Annual
Report on Form&nbsp;10-K. QWS segment assets decreased to
$756&nbsp;million at April&nbsp;1, 2001 from $1,119 million at
September&nbsp;24, 2000, principally as a result of the
write-down of certain QWS assets related to the Globalstar
business (Note&nbsp;5), offset by financing activities under the
agreements with Ericsson (Note&nbsp;3).

<P align="center">17

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<!-- link2 "ITEM 2.MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="left"><B>ITEM 2.&nbsp;MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This information should be read in conjunction with the
condensed consolidated financial statements and the notes
thereto included in Item&nbsp;1 of Part I of this Quarterly
Report and the audited consolidated financial statements and
notes thereto and Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations for the year ended
September&nbsp;24, 2000 contained in the Company&#146;s 2000
Annual Report on Form&nbsp;10-K.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except for the historical information contained herein, the
following discussion contains forward-looking statements that
are subject to risks and uncertainties. Actual results may
differ substantially from those referred to herein due to a
number of factors, including but not limited to risks associated
with: macroeconomic trends worldwide; potential declines in the
rate of growth in the CDMA subscriber base; the scale-up,
acceptance and operations of CDMA systems, including cdmaOne,
CDMA2000 1x/1xEV, and WCDMA products; integrated circuit orders
and inventory levels; strategic opportunities or acquisitions,
divestitures and investments the Company may pursue, including
investments in new ventures and operators, and the proposed
spin-off of its integrated circuits and system software
solutions; changes in the fair values of marketable securities
and derivative instruments held; the success of the Globalstar
business; developments in current or future litigation;
potential component shortages, including shortage of supplier
manufacturing capacity; the ability to develop and introduce
cost effective new products in a timely manner; the ability to
effectively manage growth; the intense competition in the
wireless communications industry; the timing and collection of
license fees and royalties; international business activities;
and accounts receivable and finance receivables, as well as the
other risks detailed in the Company&#146;s Form 10-K for fiscal
year ended September&nbsp;24, 2000. The Company&#146;s
consolidated financial data includes SnapTrack, Inc. and other
consolidated subsidiaries of the Company.

<P align="left"><B>Overview</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
QUALCOMM designs, develops, manufactures and markets digital
wireless communications products and services based on its CDMA
and other technologies. The Company licenses and receives
royalty payments on its CDMA technology from major domestic and
international telecommunications equipment suppliers. QUALCOMM
is a leading developer and supplier worldwide of CDMA-based
wireless communication integrated circuits and system software
solutions for voice and data communications products and
services. In addition, the Company designs, manufactures and
distributes products and provides services for its OmniTRACS
system. On July&nbsp;25, 2000, QUALCOMM announced the proposed
spin-off and initial public offering (IPO)&nbsp;of its
integrated circuits and system software solutions business. In
connection with this announcement, QUALCOMM filed a Current
Report on Form&nbsp;8-K dated July&nbsp;25, 2000. The Company
expects to proceed with the spin-off by the fall of 2001,
subject to approval by QUALCOMM&#146;s Board of Directors and
other factors, in the form of a 100% tax-free distribution of
common stock of QUALCOMM Spinco, Inc. (Spinco) to QUALCOMM
shareholders as of a record date to be determined. At present,
the Company does not plan an IPO of Spinco stock prior to the
spin-off.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has contracts with Globalstar LP (Globalstar) to
design, develop and manufacture subscriber products and ground
communications equipment. On January&nbsp;16, 2001, Globalstar
announced that, in order to have sufficient funds available for
the continued progress of its marketing and service activities,
it has suspended indefinitely principal and interest payments on
all of its debt, including its vendor financing obligations. As
a result, Globalstar did not make an approximate
$22&nbsp;million payment for principal and interest due to
QUALCOMM on January&nbsp;15, 2001. Globalstar also announced the
retention of a financial adviser to assist in developing future
initiatives, including restructuring Globalstar&#146;s debt,
identifying funding opportunities and pursuing other strategic
alternatives. As a result of these developments, QUALCOMM
assessed the recoverability of all assets and considered
probable exposures related to the Globalstar business. During
the first six months of fiscal 2001, the Company recorded
charges of $47&nbsp;million in cost of revenues,
$476&nbsp;million in asset impairment and related charges,
$10&nbsp;million in investment expense and $57&nbsp;million in
other non-operating charges related primarily to the impairment
of certain assets. At April&nbsp;1, 2001, the Company has
approximately $54&nbsp;million in net assets remaining,
primarily consisting of finance receivables,

<P align="center">18

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<DIV align="left">
accounts receivable, inventory and fixed assets, related to the
Globalstar business. Starting in the first quarter of fiscal
2001, the Company decided to not recognize revenue on business
with Globalstar before cash is received. The Company expects its
Globalstar-related revenues to be significantly lower for the
balance of fiscal 2001 than the comparable periods of the prior
year despite on-going sales of equipment and services to support
both continued operations and the addition of high-speed data
capability.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company intends to continue making strategic investments to
promote the worldwide adoption of CDMA products and services for
wireless voice and Internet data communications. In general, the
Company enters into strategic relationships with CDMA carriers
and developers of innovative technologies or products for the
wireless industry. In November 2000, QUALCOMM announced the
formation of QUALCOMM Ventures, an internal organization that
selects and manages strategic investments in early stage
companies and, from time to time, venture funds or incubators,
to support the adoption of CDMA and use of the wireless
Internet. Most of the Company&#146;s strategic investments
entail a high degree of risk and will not become liquid until
more than one year from the date of investment, if at all. To
the extent such investments become liquid and meet strategic
objectives, QUALCOMM will attempt to make regular periodic sales
that will be recognized in net investment income. During the
balance of fiscal 2001, the Company may reduce the planned sale
of small portions of certain equity investments until market
conditions improve. QUALCOMM may be required to recognize losses
from time to time if it determines that decreases in the value
of particular investments have become other than temporary.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2000, QUALCOMM announced a new CDMA license program
designed to allow selected early stage companies to issue equity
to QUALCOMM as a means of paying part of the license fees
payable under QUALCOMM&#146;s CDMA license agreements. The
Company records license fee revenues based on the fair value of
the equity instruments received. The measurement date for
determination of fair value is the earlier of the date on which
the parties establish a commitment to perform or the date at
which the performance is complete. The evaluation procedures
used to determine fair value include, but are not limited to,
examining the current market price for the shares if the
licensee is publicly traded, examining recent rounds of
financing and the licensee&#146;s business plan if not publicly
traded, and performing other due diligence procedures. The new
program will not affect the licensees&#146; obligation to pay
royalties under their CDMA license agreements. During the three
and six months ended April&nbsp;1, 2001, the Company recognized
$4 and $8&nbsp;million, respectively, in revenue for equity
received in connection with new licensees.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2001, QUALCOMM announced its development of an open
applications platform for CDMA-based wireless devices to provide
solutions for the wireless industry as it moves toward wireless
Internet convergence. The platform, QUALCOMM&#146;s Binary
Runtime Environment for Wireless (BREW), is a thin applications
environment that provides applications developers with an open,
standard platform for wireless devices on which to develop their
products. The BREW platform will leverage the capabilities
available in QUALCOMM CDMA Technologies&#146;
(QCT)&nbsp;integrated circuits, system software and Wireless
Internet Launchpad software, enabling development of
feature-rich applications and content while reducing memory
overhead and maximizing system performance. When it is
commercially deployed by carriers, the BREW platform will also
enable over-the-air downloads of applications by end users
directly to their BREW-enabled handsets. The BREW platform will
be provided and supported by QUALCOMM Internet Services (QIS), a
division formed in November 2000 to focus on CDMA applications
and services development.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2001, the Company announced that 3G Investments
(Australia) Pty Limited, a wholly owned subsidiary of QUALCOMM,
has been awarded 2x10 MHz licenses in the Australian
third-generation (3G) wireless spectrum auctions. The Company
entered the auctions to acquire appropriate spectrum to support
a high-capacity CDMA2000 1x/ 1xEV system in Australia, a country
with significant CDMA growth prospects. QUALCOMM&#146;s
successful participation in numerous spectrum auctions in the
past has resulted in nationwide CDMA networks being deployed in
other countries, including Mexico, Chile and Brazil. QUALCOMM is
preparing to deploy CDMA2000 1x/ 1xEV networks in Australia with
commercial 3G service planned in 2002. The Company made a
$75&nbsp;million deposit, recorded in other assets, toward the
approximate $84&nbsp;million acquisition price during the second
quarter of fiscal 2001 and expects to pay the final installment
during the third quarter of fiscal 2001. The licenses will be
issued when the final installment is paid and can be used for
commercial service starting in October 2002. The licenses will
cover a total of 12&nbsp;million

<P align="center">19

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<DIV align="left">
potential customers (POPs) in eight major markets, including
Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin and
Canberra.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2001, the Company transferred a $125&nbsp;million
Auction Discount Voucher (ADV) to Leap Wireless International,
Inc. (Leap Wireless) to support its spectrum acquisition
activities in the FCC&#146;s current auction of PCS spectrum.
The transfer was funded under the Company&#146;s
$125&nbsp;million senior credit facility with Leap Wireless, and
the $125&nbsp;million note receivable is included in other
assets. The facility is scheduled to be repaid in a lump sum
payment, including principal and accrued interest, no later than
March&nbsp;9, 2006. The facility will bear interest at LIBOR
plus 7.5%. The Company deferred the recognition of income
related to the exchange due to Leap Wireless&#146; right to
return the ADV in satisfaction of the note within two years upon
the occurrence of certain future events.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
QUALCOMM&#146;s corporate headquarters, research and development
and some manufacturing facilities are located in the state of
California, which has recently experienced temporary localized
electricity outages, or rolling blackouts, which may continue or
worsen into blackouts of longer duration in the future. These
blackouts could cause disruptions to a portion of
QUALCOMM&#146;s operations and to the operations of
QUALCOMM&#146;s suppliers, distributors and resellers, and
customers, which could have a material adverse effect on the
Company&#146;s operating results.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company was required to adopt Statement of Financial
Accounting Standards No.&nbsp;133 (FAS 133), &#147;Accounting
for Derivative Instruments and Hedging Activities&#148; as of
the beginning of fiscal 2001. FAS 133 requires certain
derivative instruments to be recorded at fair value. After
adoption of FAS 133, unrealized gains and losses on these
derivative instruments are recorded in the income statement. The
Company recorded a $129&nbsp;million gain, net of taxes, as the
cumulative effect of the change in accounting principle as of
the beginning of fiscal 2001. The cumulative effect of the
accounting change related primarily to the recognition of the
unrealized gain on a warrant to purchase 4,500,000 shares of
Leap Wireless common stock issued to the Company in connection
with its spin-off of Leap Wireless in September 1998.
Additionally, the Company recorded $148&nbsp;million in pre-tax
unrealized losses on derivative instruments during the six
months ended April&nbsp;1, 2001, primarily resulting from a
decline in the market price of Leap Wireless stock which reduced
the fair value of the Leap Wireless warrant. The new requirement
to record unrealized gains and losses on these instruments in
the income statement may cause substantial quarterly and annual
fluctuations in operating results due to stock market
volatility. See &#147;Notes to Condensed Consolidated Financial
Statements&nbsp;&#151; Note&nbsp;1&nbsp;&#151; Basis of
Presentation&#148; and &#147;Item&nbsp;3. Quantitative and
Qualitative Disclosure About Market Risk.&#148;

<P align="left"><B>Second Quarter of Fiscal 2001 Compared to Second Quarter of
Fiscal 2000</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total revenues for the second quarter of fiscal 2001 were
$713&nbsp;million compared to $728&nbsp;million for the second
quarter of fiscal 2000. Total revenues for the second quarter of
fiscal 2000 included $79&nbsp;million in revenue related to the
terrestrial-based CDMA wireless consumer phone business which
was sold in February 2000. Excluding the revenue of the business
sold from the second quarter of fiscal 2000, total revenues
increased by $64&nbsp;million in the second quarter of fiscal
2001. The increase is primarily related to higher unit shipments
of integrated circuits to wireless device manufactures, higher
royalties and license fees, and higher OmniTRACS messaging
revenue, offset by lower revenues related to the business with
Globalstar, a decrease in OmniTRACS domestic unit shipments, and
decreases in average selling prices of integrated circuits.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cost of revenues for the second quarter of fiscal 2001 was
$253&nbsp;million compared to $350&nbsp;million for the second
quarter of fiscal 2000. Total cost of revenues for the second
quarter of fiscal 2000 included $115&nbsp;million in cost of
revenues related to the terrestrial-based CDMA wireless consumer
phone business which was sold in February 2000. Excluding the
cost of revenues of the business sold from the second quarter of
fiscal 2000, total cost of revenues increased by
$18&nbsp;million in the second quarter of fiscal 2001. Cost of
revenues as a percentage of revenues was 36% for the second
quarter of fiscal 2001 and 36% for the second quarter of fiscal
2000, excluding revenues and cost of revenues related to the
terrestrial-based CDMA wireless consumer phone business which
was sold in February 2000. Although the percentage of revenues
remained consistent, lower revenues related to the business with
Globalstar negatively affected margins during the second quarter
of fiscal 2001, but the effect was offset by a higher percentage
of revenues from royalties and OmniTRACS messaging

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<DIV align="left">
services. Cost of revenues as a percentage of revenues may
fluctuate in future quarters depending on the mix of products
sold and services provided, royalties and license fees earned,
competitive pricing, new product introduction costs and other
factors.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the second quarter of fiscal 2001, research and development
expenses were $106&nbsp;million or 15% of revenues, compared to
$90&nbsp;million or 12% of revenues for the second quarter of
fiscal 2000. The dollar and percentage increases in research and
development expenses were primarily due to new product
development to support high-speed wireless Internet access and
multi-mode, multi-band, multi-network, products including
cdmaOne, CDMA2000 1x/1xEV, GSM/ GPRS, WCDMA and position
location technologies, offset by a decrease in terrestrial-based
CDMA wireless consumer phone products research and development
as a result of exiting this business in February 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the second quarter of fiscal 2001, selling, general and
administrative expenses were $87&nbsp;million or 12% of
revenues, compared to $97&nbsp;million or 13% of revenues for
the second quarter of fiscal 2000. The dollar and percentage
decrease in selling, general and administrative expenses from
the second quarter of fiscal 2000 was primarily due to a
decrease in marketing costs for terrestrial-based CDMA wireless
consumer phone products as a result of the sale of the business
in February 2000 and a decrease in legal expense, offset by an
increase in expanded international business in Japan, China,
South Korea, and Europe and higher advertising and trade show
expenses related to the expansion of the integrated circuit
customer base and product portfolio and marketing expenses for
the introduction of BREW software platform for CDMA phones.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amortization of goodwill and other acquisition-related
intangible assets was $63&nbsp;million for the second quarter of
fiscal 2001 compared to $21&nbsp;million in the second quarter
of fiscal 2000. For the second quarter of fiscal 2001, no
purchased in-process technology was recorded, compared to
$60&nbsp;million in second quarter of fiscal 2000. The increase
in amortization in the second quarter of fiscal 2001 and the
purchased in-process technology charge in the second quarter of
fiscal 2000 resulted from the acquisition of SnapTrack in March
2000. See &#147;Notes to Condensed Consolidated Financial
Statements&nbsp;&#151; Note 2&nbsp;&#151; Acquisitions.&#148;

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the second quarter of fiscal 2001, asset impairment and
related credits were $8&nbsp;million, compared to charges of
$20&nbsp;million for the second quarter of fiscal 2000. Asset
impairment and related credits during the second quarter of
fiscal 2001 were comprised primarily of adjustments to certain
reserves related to the Globalstar business and adjustments to
certain reserves related to the sale of the terrestrial-based
CDMA wireless consumer phone business. Asset impairment and
related charges during the second quarter of fiscal 2000 were
primarily related to the sale of the terrestrial-based CDMA
wireless consumer phone business in February 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the second quarter of fiscal 2001, there were no other
operating expenses, compared to $17&nbsp;million in the second
quarter of fiscal 2000. Other operating expenses during the
first six months of fiscal 2000 were comprised primarily of
employee termination and other costs related to the sale of the
terrestrial-based CDMA wireless consumer phone business.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest expense was $2&nbsp;million for the second quarter of
fiscal 2001, compared to $1&nbsp;million for the second quarter
fiscal 2000. Although the expense remained relatively
consistent, the Company incurred interest charges related to an
arbitration decision against the Company during the second
quarter of fiscal 2001, but the effect was offset by lower
interest expense resulting from decreased bank borrowings.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net investment income was $99&nbsp;million for the second
quarter of fiscal 2001 compared to net investment income of
$334&nbsp;million for the second quarter of fiscal 2000. Net
investment income for the second quarter of fiscal 2001 was
primarily comprised of $71&nbsp;million in interest income,
$30&nbsp;million in net realized gains on marketable securities,
and $12&nbsp;million related to the change in unrealized gain on
derivative instruments. The decrease was primarily due to a
$237&nbsp;million reduction in net realized gains on marketable
securities.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the second quarter of fiscal 2001, there were no
distributions on Trust Convertible Preferred Securities due to
the conversion of all remaining Trust Convertible Preferred
Securities into common stock during the second quarter of fiscal
2000. The Company recorded $2&nbsp;million in distributions for
the second quarter of fiscal 2000.

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the second quarter of fiscal 2000, the Company recorded
$3&nbsp;million in net non-operating other charges, including
$6&nbsp;million in charges relating to amounts advanced to
Metrosvyaz, offset by a $3&nbsp;million release of reserves as a
result of a settlement related to a non-operating liability.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The income tax expense was $159&nbsp;million for the second
quarter of fiscal 2001, compared to an income tax expense of
$199&nbsp;million for the second quarter of fiscal 2000. The
annual effective tax rate is expected to be 45% for fiscal 2001,
compared to 44% for fiscal 2000. The higher tax rate is
primarily a result of lower pre-tax earnings relative to
nondeductible charges, offset by lower taxes related to earnings
outside of the United States. The Company has provided a
valuation allowance on its net deferred tax assets because of
uncertainty regarding their realizability due to the expectation
that deductions from future employee stock option exercises will
exceed future taxable income. The Company&#146;s net deferred
tax assets decreased by $18&nbsp;million in the second quarter
of fiscal 2001, and the resulting decrease in the valuation
allowance was reflected as a increase to stockholders&#146;
equity.

<P align="left"><B>First Six Months of Fiscal 2001 Compared to First Six Months
of Fiscal 2000</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total revenues for the first six months of fiscal 2001 were
$1,397&nbsp;million compared to $1,848&nbsp;million for the
first six months of fiscal 2000. Total revenues for the first
six months of fiscal 2000 included $435&nbsp;million in revenue
related to the terrestrial-based CDMA wireless consumer phone
business which was sold in February 2000. Excluding the revenue
of the business sold from the first six months of fiscal 2000,
total revenues decreased by $16 million in the first six months
of fiscal 2001. The decrease is primarily attributable to the
decision to not recognize revenue on business with Globalstar
before cash is received, lower shipments of Globalstar portable
and fixed phones to service providers, a decrease in OmniTRACS
domestic unit shipments, and decreases in average selling prices
of integrated circuits, offset by higher royalties and license
fees, higher unit shipments of integrated circuits to wireless
device manufactures, and higher OmniTRACS messaging revenue.
Revenue from Kyocera Wireless Corp. and Samsung Electronics
Company (Samsung), customers of both QCT and QTL, comprised an
aggregate of 13% and 14% of total consolidated revenues,
respectively, in the first six months of 2001, compared to an
aggregate of 10% from Samsung in the first six months of fiscal
2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cost of revenues for the first six months of fiscal 2001 was
$549&nbsp;million compared to $999&nbsp;million for the first
six months of fiscal 2000. Total cost of revenues for the first
six months of fiscal 2000 included $433&nbsp;million in cost of
revenues related to the terrestrial-based CDMA wireless consumer
phone business which was sold in February 2000. Excluding the
cost of revenues of the business sold from the first six months
of fiscal 2000, total cost of revenues decreased by
$17&nbsp;million in the first six months of fiscal 2001, and
cost of revenues as a percentage of revenues was 39% for the
first six months of fiscal 2001 and 40% for the first six months
of fiscal 2000. The decision to not recognize revenue on
business with Globalstar before cash is received negatively
affected margins during the first six months of fiscal 2001, but
the effect was offset by a higher percentage of revenues from
royalties and license fees and OmniTRACS messaging services.
Cost of revenues as a percentage of revenues may fluctuate in
future quarters depending on the mix of products sold and
services provided, royalties and license fees earned,
competitive pricing, new product introduction costs and other
factors.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the first six months of fiscal 2001, research and
development expenses were $192&nbsp;million or 14% of revenues,
compared to $174&nbsp;million or 9% of revenues for the first
six months of fiscal 2000. The dollar and percentage increases
in research and development expenses were primarily due to
increased integrated circuit product initiatives to support
high-speed wireless Internet access and multi-mode, multi-band,
multi-network, products including cdmaOne, CDMA2000 1x/1xEV,
GSM/ GPRS, WCDMA and position location technologies, offset by a
decrease in terrestrial-based CDMA wireless consumer phone
products research and development as a result of exiting this
business in February 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the first six months of fiscal 2001, selling, general and
administrative expenses were $167&nbsp;million or 12% of
revenues, compared to $199 million or 11% of revenues for the
first six months of fiscal 2000. The dollar decrease in selling,
general and administrative expenses from the first six months of
fiscal 2000 was due primarily to a decrease in marketing costs
for terrestrial-based CDMA wireless consumer phone products as a

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<DIV align="left">
result of the sale of the business in February 2000. The
percentage increase is primarily due to expanded international
business in Japan, China, South Korea, and Europe and higher
advertising and trade show expenses related to the expansion of
the integrated circuit customer base and product portfolio.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amortization of goodwill and other acquisition-related
intangible assets was $126&nbsp;million for the first six months
of fiscal 2001, compared to $21 million in the first six months
of fiscal 2000. For the first six months of fiscal 2001, no
purchased in-process technology was recorded, compared to $60
million in first six months of fiscal 2000. The increase in
amortization in the first six months of fiscal 2001 and the
purchased in-process technology charge in the first six months
of fiscal 2000 resulted from the acquisition of SnapTrack in
March 2000. See &#147;Notes to Condensed Consolidated Financial
Statements&nbsp;&#151; Note 2&nbsp;&#151; Acquisitions.&#148;

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the first six months of fiscal 2001, asset impairment and
related charges were $473&nbsp;million, compared to
$46&nbsp;million for the first six months of fiscal 2000. Asset
impairment and related charges during the first six months of
fiscal 2001 were comprised primarily of charges resulting from
management&#146;s determination that certain assets related to
the Globalstar business were impaired. Asset impairment and
related charges during the first six months of fiscal 2000 were
primarily related to the sale of the terrestrial-based CDMA
wireless consumer phone business in February 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the first six months of fiscal 2001, other operating
expenses were $69 million, compared to $18&nbsp;million in the
first six months of fiscal 2000. Other operating expenses for
the first six months of fiscal 2001 were primarily related to a
$69&nbsp;million arbitration decision against the Company. Other
operating expenses during the first six months of fiscal 2000
were comprised primarily of employee termination and other costs
related to the sale of the terrestrial-based CDMA wireless
consumer phone business.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest expense was $10&nbsp;million for the first six months
of fiscal 2001, compared to $4&nbsp;million for the first six
months fiscal 2000. The increase was primarily related to
interest charges resulting from an arbitration decision against
the Company, offset by lower interest expense resulting from
decreased bank borrowings.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net investment expense was $132&nbsp;million for the first six
months of fiscal 2001 compared to net investment income of
$370&nbsp;million for the first six months of fiscal 2000. Net
investment expense for the first six months of fiscal 2001 was
primarily comprised of $140&nbsp;million in interest income and
$51&nbsp;million in net realized gains on marketable securities,
offset by $147&nbsp;million in unrealized other than temporary
losses on marketable securities and $148&nbsp;million unrealized
loss on derivative instruments in accordance with FAS 133. The
decrease was primarily due to the $148&nbsp;million in
unrealized losses on derivative instruments, $147&nbsp;million
in unrealized losses related to other than temporary losses on
marketable securities, a $10&nbsp;million charge related to the
recognition of an other than temporary loss on the
Company&#146;s investment in Globalstar Telecommunications,
Ltd., a $10&nbsp;million increase in equity losses and a
$219&nbsp;million reduction in realized gains on the sale of
marketable securities, which were offset by a $31&nbsp;million
increase in interest income, primarily related to interest
earned on finance receivables and higher cash balances and
interest rates.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There were no distributions on Trust Convertible Preferred
Securities in the first six months of fiscal 2001 due to the
conversion of all remaining Trust Convertible Preferred
Securities into common stock during the second quarter months of
fiscal 2000. The Company recorded $13&nbsp;million in
distributions for the first six months of fiscal 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other non-operating charges were $57&nbsp;million in the first
six months of fiscal 2001 compared to $3&nbsp;million in first
six months of fiscal 2000. The Company recorded $57&nbsp;million
in other non-operating charges in the first six months of fiscal
2001 to write down the recorded values of a note receivable from
Globalstar and warrants to acquire partnership interests in
Globalstar to their estimated fair values.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The income tax benefit was $171&nbsp;million for the first six
months of fiscal 2001 compared to an income tax expense of
$305&nbsp;million for the first six months of fiscal 2000. The
annual effective tax rate is expected to be 45% for fiscal 2001,
compared to 44% for fiscal 2000. The higher tax rate is
primarily a result of lower pre-tax earnings relative to
nondeductible charges, offset by lower taxes related to earnings
outside of the United States. The Company has provided a
valuation allowance on its net deferred tax assets because of
uncertainty regarding their realizability due to the expectation
that deductions from future employee stock option exercises will
exceed future taxable income. The Company&#146;s net deferred
tax assets increased by $402&nbsp;million

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<DIV align="left">
in the first six months of fiscal 2001, and the resulting
increase in the valuation allowance was reflected as a reduction
of stockholders&#146; equity.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company recorded a $129&nbsp;million gain, net of taxes, in
the first six months of fiscal 2001 as the cumulative effect of
a change in accounting principle at September&nbsp;25, 2000. The
cumulative effect of the accounting change related primarily to
the unrealized gain on a warrant to purchase 4,500,000 shares of
Leap Wireless common stock issued to the Company in connection
with its spin-off of Leap Wireless in September 1998. See
&#147;Notes to Condensed Consolidated Financial
Statements&nbsp;&#151; Note&nbsp;1&nbsp;&#151; Basis of
Presentation.&#148;

<P align="left"><B>QUALCOMM Segment Results for the Second Quarter of Fiscal
2001 Compared to Second Quarter of Fiscal 2000</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following should be read in conjunction with the second
quarter financial results of fiscal 2001 for each reporting
segment. See &#147;Notes to Condensed Consolidated Financial
Statements &#151; Note 9 &#151; Segment Information.&#148;

<P align="left"><B>CDMA Technologies Segment (QCT)</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
QCT segment revenues for the second quarter of fiscal 2001 were
$364 million compared to $279&nbsp;million for the second
quarter of fiscal 2000. Earnings before taxes for the second
quarter of fiscal 2001 were $85&nbsp;million compared to
$90&nbsp;million for the second quarter of fiscal 2000. Revenues
increased due to higher unit shipments of MSM integrated
circuits to wireless device manufacturers, offset by the
decrease in the average selling prices of integrated circuits.
The decrease in earnings before taxes was primarily due to
increased research and development primarily associated with new
integrated circuit product and technology initiatives to support
high-speed wireless Internet access and multi-band, multi-mode,
multi-network, products including cdmaOne, CDMA2000 1x/1xEV,
GSM/ GPRS, WCDMA and position location technologies, as well as
increased marketing and advertising expenses. Approximately 16
million MSM integrated circuits were sold during the second
quarter of fiscal 2001, compared to approximately
11&nbsp;million for the second quarter of fiscal 2000.
Uncertainty in global economic conditions has resulted in recent
reductions in chip demand from customers for the third and
fourth quarters of fiscal 2001.

<P align="left"><B>Technology Licensing Segment (QTL)</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
QTL segment revenues for the second quarter of fiscal 2001 were
$229 million compared to $168&nbsp;million for the second
quarter of fiscal 2000. Earnings before taxes for the second
quarter of fiscal 2001 were $210&nbsp;million compared to
$150&nbsp;million for the second quarter of fiscal 2000. Growth
in revenues and earnings before taxes was due to an increase in
worldwide demand for products based on CDMA technologies
resulting in higher royalties and license fees, as well as the
receipt of higher royalties during the second quarter of fiscal
2001 related to sales by licensees during the first quarter of
fiscal 2001 as compared to previously recognized estimated
amounts.

<P align="left"><B>Wireless Systems Segment (QWS)</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
QWS segment revenues for the second quarter of fiscal 2001 were
$95 million compared to $188&nbsp;million for the second quarter
of fiscal 2000. Earnings before taxes for the second quarter of
fiscal 2001 of $18&nbsp;million compared to earnings before
taxes of $83&nbsp;million for the second quarter of fiscal 2000.
Revenues and earnings decreased primarily due to the decision to
not recognize revenue on business with Globalstar before cash is
received, lower shipments of Globalstar portable and fixed
phones to service providers, and a decrease in OmniTRACS
domestic unit demand, offset by an increase in OmniTRACS
messaging services revenue. The Company shipped approximately
9,000 OmniTRACS and other related communication systems during
the second quarter of fiscal 2001, compared to approximately
16,000 in the second quarter of fiscal 2000. The decrease in
unit shipments is due to U.S. economic conditions affecting the
domestic long-haul trucking industry. The Company shipped less
than 1,000 Globalstar portable and fixed phones in the second
quarter of fiscal 2001 compared to 12,000 in the second quarter
of fiscal 2000. The decrease in unit shipments is due to

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<DIV align="left">
the slow ramp-up of subscriber growth realized by the Globalstar
service providers, the pending reorganization of Globalstar and
other uncertainties related to the Globalstar business.
</DIV>

<P align="left"><B>Liquidity and Capital Resources</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company anticipates that its cash and cash equivalents and
marketable securities balances of $2,315&nbsp;million at
April&nbsp;1, 2001, including interest to be earned thereon,
will be used to fund its working and other capital requirements,
including investments in other companies and other assets to
support the growth of its business, financing for customers of
CDMA infrastructure products in accordance with the agreement
with Ericsson, financing under agreements with CDMA
telecommunications operators, and other commitments. In the
event additional needs for cash arise, the Company may raise
additional funds from a combination of sources including
potential debt and equity issuance. On July&nbsp;25, 2000,
QUALCOMM announced the proposed spin-off and IPO of its
integrated circuits and system software solutions business. The
Company expects to proceed with the spin-off by the fall of
2001, subject to approval by QUALCOMM&#146;s Board of Directors
and other factors, in the form of a 100% tax-free distribution
of common stock of Spinco to QUALCOMM shareholders as of a
record date to be determined. At present, the Company does not
plan an IPO of Spinco stock prior to the spin-off.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the first six months of fiscal 2001, $373&nbsp;million in
cash was provided by operating activities, compared to
$336&nbsp;million in cash provided by operating activities in
the first six months of fiscal 2000. Cash provided by operating
activities in the first six months of fiscal 2001 and fiscal
2000 includes $578 million and $608&nbsp;million, respectively,
of net cash flow provided by operations offset by
$205&nbsp;million and $272&nbsp;million, respectively, of net
working capital requirements. Net working capital requirements
for the first six months of fiscal 2001 primarily reflect an
increase in finance receivables and inventories and a reduction
in payroll, benefits and other current liabilities, offset by a
decrease in accounts receivable.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the first six months of fiscal 2001, $46&nbsp;million in cash
was used by the Company in investing activities, including
$184&nbsp;million for other investments and acquisitions,
$123&nbsp;million for the issuance of notes receivable,
$75&nbsp;million for the purchase of wireless licenses and
$46&nbsp;million in capital expenditures, offset by
$374&nbsp;million in net purchases and maturities of
held-to-maturity securities marketable securities. The Company
intends to continue its strategic investment activities to
promote the worldwide adoption of CDMA products and the growth
of CDMA-based wireless data and CDMA-based wireless Internet
products and solutions. As part of these investment activities,
QUALCOMM may provide financing to facilitate the marketing and
sale of CDMA equipment by authorized suppliers.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the first six months of fiscal 2001, the Company&#146;s
financing activities provided $73&nbsp;million, comprised
primarily of the issuance of common stock under the
Company&#146;s stock option and employee stock purchase plans.
In the first six months of fiscal 2000, the Company&#146;s
financing activities used $30&nbsp;million, including
$112&nbsp;million in net repayments under bank lines of credit,
offset by $85&nbsp;million from the issuance of common stock
under the Company&#146;s stock option and employee stock
purchase plans.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Negotiations are underway whereby QUALCOMM would invest up to
$24&nbsp;million to fund Summit Wireless PCS, Inc. (Summit
Wireless), a CDMA wireless operator. In March 2001, QUALCOMM
purchased and assumed a bridge loan and accrued interest from a
financial institution in the amount of approximately $7 million.
The bridge loan bears interest at the prime rate plus 11.5%. The
bridge loan and accrued interest are payable in a lump sum
payment on the earlier of June&nbsp;15, 2001 or the date on
which Summit Wireless closes its next round of equity capital.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information regarding the Company&#146;s financial commitments
at December&nbsp;31, 2000 is provided in the Notes to the
Condensed Consolidated Financial Statements. See &#147;Notes to
Condensed Consolidated Financial Statements&nbsp;&#151;
Note&nbsp;3&nbsp;&#151; Composition of Certain Balance Sheet
Captions, Note&nbsp;5&nbsp;&#151; Investments in Other Entities,
and Note&nbsp;8&nbsp;&#151; Commitments and Contingencies.&#148;

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<P align="left"><B>Future Accounting Requirements</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 1999, the Securities and Exchange Commission
(SEC)&nbsp;issued Staff Accounting Bulletin No.&nbsp;101 (SAB
101), &#147;Revenue Recognition in Financial Statements.&#148;
The SEC staff subsequently amended SAB&nbsp;101 to provide
registrants with additional time to implement SAB&nbsp;101. The
Company is required to adopt SAB 101 by the fourth quarter of
fiscal 2001, applied retroactively to the first quarter of
fiscal 2001. The Company does not expect the adoption of
SAB&nbsp;101 to have a material effect on its consolidated
financial position, results of operations or cash flows.

<!-- link2 "ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="left"><B>ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Financial market risks related to interest rates, foreign
currency exchange rates and equity prices are described in the
Company&#146;s 2000 Annual Report on Form&nbsp;10-K.
Available-for-sale equity securities and derivative instruments
recorded at fair value under FAS 115 and FAS 133, respectively,
subject the Company to equity price risk. The recorded value of
available-for-sale equity securities decreased to
$159&nbsp;million at April&nbsp;1, 2001 from $426&nbsp;million
at September&nbsp;24, 2000. The recorded value of derivative
instruments subject to FAS 133 at April&nbsp;1, 2001 is
$112&nbsp;million. The Company generally invests in companies in
the high-technology industry, and typically does not attempt to
reduce or eliminate its market exposure on these securities. As
of April&nbsp;1, 2001, four equity positions constituted
approximately 87% of the fair value of the available-for-sale
equity securities portfolio. During the first six months of
fiscal 2001, many high-technology stocks experienced a
significant decrease in value, negatively affecting the fair
value of the Company&#146;s available-for-sale equity
securities. The portfolio&#146;s concentrations in specific
companies and industry segments may vary over time, and changes
in concentrations may affect the portfolio&#146;s price
volatility.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At April&nbsp;1, 2001, there have been no other material changes
to the market risks described at September&nbsp;24, 2000.
Additionally, the Company does not anticipate any near-term
changes in the nature of its market risk exposures or in
management&#146;s objectives and strategies with respect to
managing such exposures.

<P align="center">26
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PART II.OTHER INFORMATION" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="left"><B>PART II.&nbsp;OTHER INFORMATION</B>

<!-- link2 "ITEM 1.LEGAL PROCEEDINGS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="left"><B>ITEM 1.&nbsp;LEGAL PROCEEDINGS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A review of the Company&#146;s current litigation is disclosed
in the Notes to Condensed Consolidated Financial Statements. See
&#147;Notes to Condensed Consolidated Financial
Statements&nbsp;&#151; Note&nbsp;8&nbsp;&#151; Commitments and
Contingencies.&#148; The Company is also engaged in other legal
actions arising in the ordinary course of its business and
believes that the ultimate outcome of these actions will not
have a material adverse effect on its results of operations,
liquidity or financial position.

<!-- link2 "ITEM 2.CHANGES IN SECURITIES" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="left"><B>ITEM 2.&nbsp;CHANGES IN SECURITIES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.

<!-- link2 "ITEM 3.DEFAULTS UPON SENIOR SECURITIES" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="left"><B>ITEM 3. DEFAULTS UPON SENIOR SECURITIES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.

<!-- link2 "ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="left"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Annual Meeting of Shareholders of QUALCOMM Incorporated was
convened in San Diego, California, on February&nbsp;27, 2001 at
9:30 a.m. There were issued and outstanding on December&nbsp;29,
2000, the record date, 752,029,328 shares of Common Stock. There
were present at said meeting in person or by proxy, shareholders
of the Corporation who were the holders of 666,325,844 shares of
Common Stock entitled to vote thereat, constituting a quorum.
The proposal to elect four Class&nbsp;I directors to hold office
until the 2004 Annual Meeting of Stockholders received the
following votes:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>For</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Against</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Irwin Mark Jacobs</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">662,817,801</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,508,043</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Adelia A. Coffman</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">656,135,745</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,190,099</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Neil Kadisha</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">657,298,913</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,026,931</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	Richard Sulpizio</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">662,609,999</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,715,845</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The proposal to approve the Company&#146;s 2001 Stock Option
Plan received the following vote:

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Broker</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>For</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Against</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Abstain</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Non-Votes</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">248,757,427</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">172,900,455</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,551,756</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">241,116,206</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foregoing proposal was approved and accordingly ratified.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The proposal to approve the Company&#146;s 2001 Employee Stock
Purchase Plan received the following vote:

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Broker</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>For</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Against</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Abstain</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Non-Votes</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">404,785,631</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,183,568</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,240,459</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">241,116,186</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foregoing proposal was approved and accordingly ratified.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To proposal to approve the Company&#146;s 2001 Non-Employee
Directors&#146; Stock Option Plan received the following vote:

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Broker</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>For</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Against</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Abstain</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Non-Votes</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">308,814,927</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112,453,052</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,942,860</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">241,115,005</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foregoing proposal was approved and accordingly ratified.

<P align="center">27
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The proposal to ratify the selection of PricewaterhouseCoopers
LLP as the Company&#146;s independent accountants received the
following vote:

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Non-Votes</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>For</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Against</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Abstain</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Broker</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="right" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	662,595,958</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,315,510</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,414,376</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foregoing proposal was approved and accordingly ratified.

<!-- link2 "ITEM 5.OTHER INFORMATION" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="left"><B>ITEM 5. OTHER INFORMATION</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.

<!-- link2 "ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="left"><B>ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K</B>

<P align="left">Exhibits

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="89%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	3.1</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Restated Certificate of Incorporation.(1)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	3.2</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Certificate of Amendment of Restated Certificate of
	Incorporation.(2)(3)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	3.3</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Certificate of Designation of Preferences.(4)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	3.4</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Bylaws.(5)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	3.5</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Amendment of the Bylaws.(6)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	10.39</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	2001 Stock Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	10.40</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Stock Option Grant Notice and Agreement under the 2001 Stock
	Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	10.41</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	2001 Employee Stock Purchase Plan.*</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	10.42</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	2001 Non-Employee Directors&#146; Stock Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
	10.43</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top"><FONT size="2">
	Stock Option Grant Notice and Agreement under the 2001
	Non-Employee Directors&#146; Stock Option Plan.*</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>(1)&nbsp;</TD>
	<TD align="left">
	Filed as an exhibit to the Registrant&#146;s Registration
	Statement on Form S-3 (No.&nbsp; 33-62724).</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>(2)&nbsp;</TD>
	<TD align="left">
	Filed as an exhibit to the Registrant&#146;s Quarterly Report on
	Form&nbsp;10-Q for the quarter ended March&nbsp;27, 1994, as
	amended.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>(3)&nbsp;</TD>
	<TD align="left">
	Filed as an exhibit to the Registrant&#146;s Current Report on
	Form&nbsp;8-K filed on December&nbsp;23, 1999.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>(4)&nbsp;</TD>
	<TD align="left">
	Filed as an exhibit to the Registrant&#146;s Annual Report on
	Form&nbsp;10-K for the fiscal year ended September&nbsp;29, 1996.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>(5)&nbsp;</TD>
	<TD align="left">
	Filed as an exhibit to the Registrant&#146;s Registration
	Statement on Form S-1 (No.&nbsp; 33-42782).</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>(6)&nbsp;</TD>
	<TD align="left">
	Filed as an exhibit to the Registrant&#146;s Annual Report on
	Form&nbsp;10-K for the fiscal year ended September&nbsp;28, 1997.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp; *</TD>
	<TD align="left">
	Denotes a compensatory plan contract or arrangement in which the
	Company&#146;s directors and named executive officers may
	participate.</TD>
</TR>

</TABLE>

<P align="center">28

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><B>SIGNATURES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	QUALCOMM Incorporated</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	/s/ ANTHONY S. THORNLEY <BR>
	 _________________________________________ <BR>
	 Anthony S. Thornley</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	Executive Vice President &#38;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	Chief Financial Officer</TD>
</TR>

</TABLE>

<P align="left">Dated: April&nbsp;26, 2001

<P align="center">29
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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.39
<SEQUENCE>2
<FILENAME>a71824ex10-39.txt
<DESCRIPTION>EXHIBIT 10.39
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.39

                             QUALCOMM INCORPORATED
                             2001 STOCK OPTION PLAN


        1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

               1.1 ESTABLISHMENT. The QUALCOMM Incorporated 2001 Stock Option
Plan (the "PLAN") is hereby established effective as of February 27, 2001 (the
"EFFECTIVE DATE"), subject to the approval by Company shareholders.

               1.2 PURPOSE. The purpose of the Plan is to advance the interests
of the Participating Company Group and its stockholders by providing an
incentive to attract and retain persons eligible to receive Options under the
Plan and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group.

               1.3 TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the agreements
evidencing Options granted under the Plan have lapsed. However, all Incentive
Stock Options shall be granted, if at all, within ten (10) years from the
earlier of the date the Plan is adopted by the Board or the date the Plan is
duly approved by the stockholders of the Company.

        2. DEFINITIONS AND CONSTRUCTION.

               2.1 DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                      (a) "AFFILIATE" means (i) an entity, other than a Parent
Corporation, that directly, or indirectly through one or more intermediary
entities, controls the Company or (ii) an entity, other than a Subsidiary
Corporation, that is controlled by the Company directly, or indirectly through
one or more intermediary entities, or (iii) an entity which the Board designates
as an Affiliate. For this purpose, the term "control" (including the term
"controlled by") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the relevant
entity, whether through the ownership of voting securities, by contract or
otherwise; or shall have such other meaning assigned such term for the purposes
of registration on Form S-8 under the Securities Act.

                      (b) "BOARD" means the Board of Directors of the Company.
If one or more Committees have been appointed by the Board to administer the
Plan, "BOARD" also means such Committee(s).

                      (c) A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, a
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial


                                       1
<PAGE>   2

ownership of more than fifty percent (50%) of the total combined voting power of
the outstanding voting securities of the Company or, in the case of a
Transaction described in Section 2.1(u)(iii), the corporation or other business
entity to which the assets of the Company were transferred (the "TRANSFEREE"),
as the case may be. The Board shall determine in its discretion whether multiple
sales or exchanges of the voting securities of the Company or multiple Ownership
Change Events are related. Notwithstanding the preceding sentence, a Change in
Control shall not include a Spinoff Transaction.

                      (d) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                      (e) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                      (f) "COMPANY" means QUALCOMM Incorporated, a Delaware
corporation, or any Successor.

                      (g) "CONSULTANT" means a person engaged to provide
consulting or advisory services (other than as an Employee or a Director) to a
Participating Company.

                      (h) "DIRECTOR" means a member of the Board or of the board
of directors of any other Participating Company.

                      (i) "DISABILITY" means the Participant has been determined
by the long-term disability insurer of the Participating Company Group as
eligible for disability benefits under the long-term disability plan of the
Participating Company Group or the Participant has been determined eligible for
Supplemental Security Income benefits by the Social Security Administration of
the United States of America.

                      (j) "EMPLOYEE" means any person treated as an employee
(including an Officer or a Director who is also treated as an employee) in the
records of a Participating Company and, with respect to any Incentive Stock
Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither Service as a Director nor payment of a
Director's fee shall be sufficient to constitute employment for purposes of the
Plan. The Company shall determine in good faith and in the exercise of its
discretion whether an individual has become or has ceased to be an Employee and
the effective date of such individual's employment or termination of employment,
as the case may be.

                      (k) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                      (l) "FAIR MARKET VALUE" means, as of any date, the value
of the Stock determined as follows:


                                       2
<PAGE>   3

                             (i) If the Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of a share of Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or if the stock is traded on more than one exchange or
market, the exchange or market with the greatest volume of trading in the Stock)
on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable.

                             (ii) In the absence of such markets for the Stock,
the Fair Market Value shall be determined in good faith by the Board.

                      (m) "INCENTIVE STOCK OPTION" means an Option intended to
be (as set forth in the Option Agreement) and which qualifies as an incentive
stock option within the meaning of Section 422(b) of the Code.

                      (n) "INSIDER" means an Officer, a Director of the Company
or other person whose transactions in Stock are subject to Section 16 of the
Exchange Act.

                      (o) "NON-CONTROL AFFILIATE" means any entity in which any
Participating Company has an ownership interest and which the Board shall
designate as a Non-Control Affiliate.

                      (p) "NONSTATUTORY STOCK OPTION" means an Option not
intended to be (as set forth in the Option Agreement) or which does not qualify
as an Incentive Stock Option.

                      (q) "NORMAL RETIREMENT AGE" means the date on which a
Participant has attained the age of sixty (60) years and has completed ten years
of continuous Service.

                      (r) "OFFICER" means any person designated by the Board as
an officer of the Company.

                      (s) "OPTION" means a right to purchase Stock pursuant to
the terms and conditions of the Plan. An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.

                      (t) "OPTION AGREEMENT" means an agreement, in such form as
the Board may approve, between the Company and a Participant setting forth the
terms, conditions and restrictions of an Option granted to the Participant and
any shares acquired upon the exercise thereof.

                      (u) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or
substantially all, as determined by the Board in its discretion, of the assets
of the Company; or (iv) a liquidation or dissolution of the Company.


                                       3
<PAGE>   4

                      (v) "PARENT CORPORATION" means any present or future
"parent corporation" of the Company, as defined in Section 424(e) of the Code.

                      (w) "PARTICIPANT" means any eligible person who has been
granted one or more Options.

                      (x) "PARTICIPATING COMPANY" means the Company or any
Parent Corporation or Subsidiary Corporation or Affiliate.

                      (y) "PARTICIPATING COMPANY GROUP" means, at any point in
time, all entities collectively which are then Participating Companies.

                      (z) "PRIOR PLAN OPTION" means, any option granted pursuant
to the Company's 1991 Stock Option Plan which is outstanding on or after the
date on which the Board adopts the Plan or which is granted thereafter and prior
to the Effective Date.

                      (aa) "RULE 16b-3" means Rule 16b-3 under the Exchange Act,
as amended from time to time, or any successor rule or regulation.

                      (bb) "SECTION 162(m)" means Section 162(m) of the Code.

                      (cc) "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                      (dd) "SERVICE" means

                             (i) a Participant's employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director
or a Consultant. A Participant's Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Participant renders
Service to the Participating Company Group or a change in the Participating
Company for which the Participant renders such Service, provided that there is
no interruption or termination of the Participant's Service. Furthermore, only
to such extent as may be provided by the Company's leave policy, a Participant's
Service with the Participating Company Group shall not be deemed to have
terminated if the Participant takes any military leave, sick leave, or other
leave of absence approved by the Company. Notwithstanding the foregoing, a leave
of absence shall be treated as Service for purposes of vesting only to such
extent as may be provided by the Company's leave policy. The Participant's
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the entity for which the Participant performs Service ceasing to
be a Participating Company; except that if the entity for which Participant
performs Service is a Subsidiary Corporation and ceases to be a Participating
Company as a result of the distribution of the voting stock of such Subsidiary
Corporation to the shareholders of the Company, Service shall not be deemed to
have terminated as a result of such distribution. Subject to the foregoing, the
Company, in its discretion, shall determine whether the Participant's Service
has terminated and the effective date of such termination.

                             (ii) Notwithstanding any other provision of this
Section, a Participant's Service shall not be deemed to have terminated merely
because the Participating Company for which the Participant renders Service
ceases to be a member of the Participating


                                       4
<PAGE>   5

Company Group by reason of a Spinoff Transaction, nor shall Service be deemed to
have terminated upon resumption of Service from the Spinoff Company to a
Participating Company. For all purposes under this Plan, a Participant's Service
shall include Service, whether in the capacity of an Employee, Director or a
Consultant, for the Spinoff Company provided a Participant was employed by the
Participating Company Group immediately prior to the Spinoff Transaction.
Notwithstanding the foregoing, if the Company's auditors determine that the
provisions or operation of the preceding two sentences would cause the Company
to incur a compensation expense and provided further that in the absence of the
preceding two sentences no such compensation expense would be incurred, then the
two preceding sentences shall be without force or effect, and the vesting and
exercisability of each outstanding Option and any shares acquired upon the
exercise thereof shall be determined under any other applicable provision of the
Plan or the Option Agreement evidencing such Option.

                      (ee) "SPINOFF COMPANY" means a Participating Company which
ceases to be such as a result of a Spinoff Transaction.

                      (ff) "SPINOFF TRANSACTION" means a transaction in which
the voting stock of an entity in the Participating Company Group is distributed
to the shareholders of a parent corporation as defined by Section 424(e) of the
Code, of such entity.

                      (gg) "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.

                      (hh) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

                      (ii) "SUCCESSOR" means a corporation into or with which
the Company is merged or consolidated or which acquires all or substantially all
of the assets of the Company and which is designated by the Board as a Successor
for purposes of the Plan.

                      (jj) "TEN PERCENT STOCKHOLDER" means a person who, at the
time an Option is granted to such person, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of a
Participating Company within the meaning of Section 422(b)(6) of the Code.

               2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

        3. ADMINISTRATION.

               3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered
by the Board and its designees.

               3.2 AUTHORITY OF OFFICERS. Any Officer shall have the authority
to act on behalf of the Company with respect to any matter, right, obligation,
determination or election


                                       5
<PAGE>   6

which is the responsibility of or which is allocated to the Company herein,
provided the Board has delegated such authority to the Officer with respect to
such matter, right, obligation, determination or election.

               3.3 POWERS OF THE BOARD. In addition to any other powers set
forth in the Plan and subject to the provisions of the Plan, the Board shall
have the power and authority:

                      (a) to determine the persons to whom, and the time or
times at which, Options shall be granted and the number of shares of Stock to be
subject to each Option;

                      (b) to designate Options as Incentive Stock Options or
Nonstatutory Stock Options;

                      (c) to determine the terms, conditions and restrictions
applicable to each Option (which need not be identical) and any shares acquired
upon the exercise thereof, including, without limitation, (i) the exercise price
of the Option, (ii) the method of payment for shares purchased upon the exercise
of the Option, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with the Option or such shares, including by
the withholding or delivery of shares of Stock, (iv) the timing, terms and
conditions of the exercisability of the Option or the vesting of any shares
acquired upon the exercise thereof, (v) the time of the expiration of the
Option, (vi) the effect of the Participant's termination of Service on any of
the foregoing, and (vii) all other terms, conditions and restrictions applicable
to the Option or such shares not inconsistent with the terms of the Plan;

                      (d) to approve one or more forms of Option Agreement;

                      (e) to amend, modify, extend, cancel (subject to the
limitations in Section 11) or renew any Option or to waive any restrictions or
conditions applicable to any Option or any shares acquired upon the exercise
thereof;

                      (f) to accelerate, continue, extend or defer the
exercisability of any Option or the vesting of any shares acquired upon the
exercise thereof, including with respect to the period following a Participant's
termination of Service;

                      (g) to delegate to any proper Officer the authority to
grant one or more Options, without further approval of the Board, to any person
eligible pursuant to Section 5, other than a person who, at the time of such
grant, is an Insider; provided, however, that (i) the exercise price per share
of each such Option shall be equal to the Fair Market Value per share of the
Stock on the effective date of grant, and (ii) each such Option shall be subject
to the terms and conditions of the appropriate standard form of Option Agreement
approved by the Board and shall conform to the provisions of the Plan and such
other guidelines as shall be established from time to time by the Board;

                      (h) to determine the Fair Market Value of shares of Stock
or other property;

                      (i) to construe, interpret and apply the provisions of the
Plan and Options granted under it, in its discretion; to establish, amend and
revoke rules and regulations


                                       6
<PAGE>   7

for its administration; and to take all such actions and make all such decisions
as may be necessary or appropriate for the operation and administration of the
Plan, including, without limitation, all such decisions and determinations as
may be expressly delegated to the Board by the terms of the Plan. The Board, in
the exercise of this power, may correct any defect, omission or inconsistency in
the Plan or in any Option Agreement, in a manner and to the extent it shall
deem, in its discretion, necessary, desirable, appropriate or expedient to make
the Plan fully effective.

               3.4 SCOPE OF REVIEW OF BOARD ACTION.

                      (a) The Board's action taken pursuant to the authority set
forth in Sections 3.3(a) through (g) above, and any action, decision or
determination with respect to any matter reserved to the Board in its sole and
absolute discretion under the terms of this Plan shall be final, binding, and
conclusive on the Participating Company Group, any Participant and any person
having an interest in the Plan or any Option granted hereunder.

                      (b) Except as otherwise provided in Section 3.4(a), the
Board's determination of the construction and interpretation of any provision of
the Plan and any actions, decisions or determinations reserved to the Board in
its discretion which are made in good faith shall be final, binding and
conclusive on the Participating Company Group, any Participant, and any person
having an interest in the Plan or any Option granted hereunder.

               3.5 ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.

               3.6 COMMITTEE COMPLYING WITH SECTION 162(m). If the Company is a
"publicly held corporation" within the meaning of Section 162(m), the Board may
establish a Committee of "outside directors" within the meaning of Section
162(m) to approve the grant of any Option which might reasonably be anticipated
to result in the payment of employee remuneration that would otherwise exceed
the limit on employee remuneration deductible for income tax purposes pursuant
to Section 162(m).

               3.7 INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or Officers or
Employees of the Participating Company Group, members of the Board and any
Officers or Employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty


                                       7
<PAGE>   8

(60) days after the institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at its own expense to
handle and defend the same, and to retain complete control over the litigation
and/or settlement of such suit, action or proceeding.

               3.8 ARBITRATION. Any dispute or claim concerning any Options
granted (or not granted) pursuant to this Plan and any other disputes or claims
relating to or arising out of the Plan shall be fully, finally and exclusively
resolved by binding arbitration conducted pursuant to the Commercial Arbitration
Rules of the American Arbitration Association in San Diego, California. By
accepting an Option, Participants and the Company waive their respective rights
to have any such disputes or claims tried by a judge or jury.

        4. SHARES SUBJECT TO PLAN.

               4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be One Hundred Fifty Nine Million, Five
Hundred and Forty Thousand, Five Hundred and Seventeen (159,540,517). The share
reserve shall consist of authorized but unissued or reacquired shares of Stock
or any combination thereof. However, the share reserve, determined at any time,
shall be reduced by the number of shares subject to the Prior Plan Options. If
an outstanding Option, including a Prior Plan Option, for any reason expires or
is terminated or canceled or if shares of Stock are acquired upon the exercise
of an Option subject to a Company repurchase option and are repurchased by the
Company at the Participant's exercise or purchase price, the shares of Stock
allocable to the unexercised portion of such Option or Prior Plan Option or such
repurchased shares of Stock shall again be available for issuance under the
Plan.

               4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Options, in the ISO Share Issuance
Limit set forth in Section 4.1, in the Section 162(m) Grant Limit set forth in
Section 5.3, and in the exercise price per share of any outstanding Options. If
a majority of the shares which are of the same class as the shares that are
subject to outstanding Options are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event, as defined in
Section 2.1(u) shares of another corporation (the "NEW SHARES"), the Board may
unilaterally amend the outstanding Options to provide that such Options are
exercisable for New Shares. In the event of any such amendment, the number of
shares subject to, and the exercise price per share of, the outstanding Options
shall be adjusted in a fair and equitable manner as determined by the Board, in
its discretion. Notwithstanding the foregoing, any fractional share resulting
from an adjustment pursuant to this Section shall be rounded down to the nearest
whole number, and in no event may the exercise price of any Option be decreased
to an amount less than the par value, if any, of the Stock subject to the
Option.


                                       8
<PAGE>   9

        5. ELIGIBILITY AND OPTION LIMITATIONS.

               5.1 PERSONS ELIGIBLE FOR OPTIONS.

                      (a) Except as otherwise provided in this Section 5.1,
Options may be granted only to Employees, Consultants, and Directors. Options
are granted in the sole and absolute discretion of the Board and eligibility in
accordance with this Section shall not entitle any person to be granted an
Option, or, having been granted an Option, to be granted an additional Option.

                      (b) INCENTIVE STOCK OPTIONS. An Incentive Stock Option may
be granted only to a person who, on the effective date of grant, is an Employee
of the Company, a Parent Corporation or a Subsidiary Corporation (each being an
"ISO-QUALIFYING Corporation"). Any person who is not an Employee of an
ISO-Qualifying Corporation on the effective date of the grant of an Option to
such person may be granted only a Nonstatutory Stock Option.

                      (c) CONSULTANT OPTIONS. A Consultant shall not be eligible
for the grant of an Option if, at the time of grant, a Form S-8 Registration
Statement under the Securities Act ( "Form S-8") is not available to register
either the offer or the sale of the Company's securities to such Consultant
because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the Company
determines both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B)
does not require registration under the Securities Act in order to comply with
the requirements of the Securities Act, if applicable, and (ii) that such grant
complies with the securities laws of all other relevant jurisdictions.

               5.2 FAIR MARKET VALUE LIMITATION. To the extent that Options
designated as Incentive Stock Options (granted under all stock plans of the
ISO-Qualifying Corporation, including the Plan) become exercisable by a
Participant for the first time during any calendar year for stock having a Fair
Market Value greater than One Hundred Thousand Dollars ($100,000), the portions
of such Options which exceed such amount shall be treated as Nonstatutory Stock
Options. For purposes of this Section, Options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of stock shall be determined as of the time the Option
with respect to such stock is granted. If the Code is amended to provide for a
different limitation from that set forth in this Section, such different
limitation shall be deemed incorporated herein effective as of the date and with
respect to such Options as required or permitted by such amendment to the Code.
If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this
Section, the Participant may designate which portion of such Option the
Participant is exercising. In the absence of such designation, the Participant
shall be deemed to have exercised the Incentive Stock Option portion of the
Option first.

               5.3 SECTION 162(m) GRANT LIMIT. Subject to adjustment as provided
in Section 4.2, at any such time as the Company is a "publicly held corporation"
within the meaning of Section 162(m), no Employee or prospective Employee shall
be granted one or more Options within any fiscal year of the Company which in
the aggregate are for the purchase of


                                       9
<PAGE>   10

more than Three Million (3,000,000) shares (the "SECTION 162(m) GRANT Limit").
An Option which is canceled in the same fiscal year of the Company in which it
was granted shall continue to be counted against the Section 162(m) Grant Limit
for such period.

        6. TERMS AND CONDITIONS OF OPTIONS.

               Options shall be evidenced by Option Agreements specifying, among
other things, the number of shares of Stock covered thereby, in such form as the
Board shall from time to time establish. No Option or purported Option shall be
a valid and binding obligation of the Company unless evidenced by a fully
executed Option Agreement or by communicating with the Company in such other
manner as the Company may authorize. Option Agreements may incorporate all or
any of the terms of the Plan by reference and shall comply with and be subject
to the following terms and conditions:

               6.1 EXERCISE PRICE. The exercise price for each Option shall be
established in the discretion of the Board; provided, however, that (A) the
exercise price per share for an Option shall be not less than the Fair Market
Value of a share of Stock on the effective date of grant of the Option, and (B)
no Incentive Stock Option granted to a Ten Percent Stockholder shall have an
exercise price per share less than one hundred ten percent (110%) of the Fair
Market Value of a share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory Stock Option) may be granted with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.

               6.2 EXERCISABILITY AND TERM OF OPTIONS.

                      (a) OPTION EXERCISABILITY. Options shall be exercisable at
such time or times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be determined by the
Board and set forth in the Option Agreement evidencing such Option; provided,
however, that (A) no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years after the effective date of grant of such Option,
and (B) no Incentive Stock Option granted to a Ten Percent Stockholder shall be
exercisable after the expiration of five (5) years after the effective date of
grant of such Option. Subject to the foregoing, unless otherwise specified by
the Board in the grant of an Option, any Option granted hereunder shall
terminate ten (10) years after the effective date of grant of the Option, unless
earlier terminated in accordance with its provisions, or the terms of the Plan.

                      (b) PARTICIPANT RESPONSIBILITY FOR EXERCISE OF OPTION.
Each Participant is responsible for taking any and all actions as may be
required to exercise any Option in a timely manner, and for properly executing
any documents as may be required for the exercise of an Option in accordance
with such rules and procedures as may be established from time to time. By
signing an Option Agreement each Participant acknowledges that information
regarding the procedures and requirements for the exercise of any Option is
available upon such Participant's request. The Company shall have no duty or
obligation to notify any Participant of the expiration date of any Option.


                                       10
<PAGE>   11

               6.3 PAYMENT OF EXERCISE PRICE.

                      (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check or
cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Participant having a Fair Market Value not less
than the exercise price, (iii) by delivery of a properly executed notice
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "CASHLESS EXERCISE"), (iv) provided that the Participant is an
Employee (unless otherwise not prohibited by law, including, without limitation,
any regulation promulgated by the Board of Governors of the Federal Reserve
System) and in the Company's sole and absolute discretion at the time the Option
is exercised, by delivery of the Participant's promissory note in a form
approved by the Company for the aggregate exercise price, provided that, if the
Company is incorporated in the State of Delaware, the Participant shall pay in
cash that portion of the aggregate exercise price not less than the par value of
the shares being acquired, (v) by such other consideration as may be approved by
the Board from time to time to the extent permitted by applicable law, or (vi)
by any combination thereof. The Board may at any time or from time to time, by
approval of or by amendment to the standard forms of Option Agreement described
in Section 7, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.

                      (b) LIMITATIONS ON FORMS OF CONSIDERATION.

                             (i) TENDER OF STOCK. Notwithstanding the foregoing,
an Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would
constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company's stock. Unless otherwise provided by
the Board, an Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either have
been owned by the Participant for more than six (6) months (and were not used
for another Option exercise by attestation during such period) or were not
acquired, directly or indirectly, from the Company.

                             (ii) CASHLESS EXERCISE. The Company reserves, at
any and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise.

                             (iii) PAYMENT BY PROMISSORY NOTE. No promissory
note shall be permitted if the exercise of an Option using a promissory note
would be a violation of any law. Any permitted promissory note shall be on such
terms as the Board shall determine. The Board shall have the authority to permit
or require the Participant to secure any promissory note used to exercise an
Option with the shares of Stock acquired upon the exercise of the Option or with
other collateral acceptable to the Company. Unless otherwise provided by the
Board, if the


                                       11
<PAGE>   12

Company at any time is subject to the regulations promulgated by the Board of
Governors of the Federal Reserve System or any other governmental entity
affecting the extension of credit in connection with the Company's securities,
any promissory note shall comply with such applicable regulations, and the
Participant shall pay the unpaid principal and accrued interest, if any, to the
extent necessary to comply with such applicable regulations.

               6.4 TRANSFERABILITY. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the person to whom the Incentive
Stock Option is granted only by such person. A Nonstatutory Stock Option shall
not be transferable in any manner (including without limitation, sale,
alienation, anticipation, pledge, encumbrance, or assignment) other than, (i) by
will or by the laws of descent and distribution, (ii) by written designation of
a beneficiary, in a form acceptable to the Company, with such designation taking
effect upon the death of a Participant, (iii) by delivering written notice to
the Company, in a form acceptable to the Company (including such
representations, warranties and indemnifications as the Company shall require a
Participant to make to protect the Company's interests and ensure that this
Nonstatutory Stock Option has been transferred under the circumstances approved
by the Company), by gift to a Participant's spouse, former spouse, children,
stepchildren, grandchildren, parent, stepparent, grandparent, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, persons having one of the foregoing types of
relationship with a Participant due to adoption, any person sharing a
Participant's household (other than a tenant or employee), a foundation in which
these persons or the Participant control the management of assets, and any other
entity in which these persons (or the Participant) own more than fifty percent
of the voting interests. A transfer to an entity in which more than fifty
percent of the voting interests are owned by these persons (or the Participant)
in exchange for an interest in that entity is specifically included as a
permissible type of transfer. In addition, a transfer to a trust created solely
for the benefit (i.e., a Participant and/or any or all of the foregoing persons
hold more than 50 percent of the beneficial interest in the trust) of a
Participant and/or any or all of the foregoing persons is also a permissible
transferee, or (iv) such other transferees as may be authorized by the Board in
its sole and absolute discretion. During a Participant's life this Nonstatutory
Stock Option is exercisable only by the Participant or a transferee satisfying
the above conditions. Except in the event of a Participant's death, upon
transfer of a Nonstatutory Stock Option to any or all of the foregoing persons,
the Participant, as the Optionee, is liable for any and all taxes due upon
exercise of those transferred Nonstatutory Stock Options. At no time will a
transferee who is considered an affiliate under Rule 144(a)(1) be able to sell
any or all such Stock without complying with Rule 144. The right of a transferee
to exercise the transferred portion of this Nonstatutory Stock Option shall
terminate in accordance with the Participant's right of exercise under this
Nonstatutory Stock Option and is further subject to such representations,
warranties and indemnifications from the transferee that the Company requires
the transferee to make to protect the Company's interests and ensure that this
Nonstatutory Stock Option has been transferred under the circumstances approved
by the Company. Once a portion of a Nonstatutory Stock Option is transferred, no
further transfer may be made of that portion of the Nonstatutory Stock Option.


                                       12
<PAGE>   13

               6.5 EFFECT OF TERMINATION OF SERVICE.

                      (a) OPTION EXERCISABILITY. Subject to earlier termination
of the Option as otherwise provided herein and unless otherwise provided by the
Board in the grant of an Option and set forth in the Option Agreement, an Option
shall be exercisable after a Participant's termination of Service only during
the applicable time period determined in accordance with this Section and
thereafter shall terminate.

                             (i) DISABILITY. If the Participant's Service
terminates because of the Disability of the Participant, the Option shall
continue for the period of such Disability under the terms and conditions of the
Option Agreement and may be exercised by the Participant at any time during the
period of Disability but in any event no later than the date of expiration of
the Option's term as set forth in the Option Agreement evidencing such Option
(the "OPTION EXPIRATION DATE").

                             (ii) DEATH. If the Participant's Service terminates
because of the death or because of the Disability of the Participant and such
termination is subsequently followed by the death of the Participant, (A) the
exercisability and vesting of the Option and, in the case of an immediately
exercisable Option, any Shares acquired upon exercise thereof shall be
accelerated effective upon the Participant's death, and (B) the Option, to the
extent unexercised and exercisable on the date of the Participant's death, may
be exercised by the Participant's legal representative or other person who
acquired the right to exercise the Option by reason of the Participant's death
at any time prior to the expiration of twelve (12) months after the date of the
Participant's death, but in any event no later than the Option Expiration Date.

                             (iii) NORMAL RETIREMENT AGE. If the Participant's
Service terminates at or after Normal Retirement Age of the Participant, the
Option, to the extent unexercised and exercisable on the date on which the
Participant's Service terminated, may be exercised by the Participant at any
time prior to the expiration of twelve (12) months after the date on which the
Participant's Service terminated, but in any event no later than the Option
Expiration Date.

                             (iv) TERMINATION AFTER LAYOFF. If the Participant's
Service ceases as a result of "Layoff" (as defined below), then, subject to the
Participant's execution of a general release of claims satisfactory to the
Company, (A) the exercisability and vesting of the Option and, in the case of an
immediately exercisable Option, any shares acquired upon the exercise thereof
shall be accelerated effective as of the date on which the Participant's Service
terminated by ten percent (10%) of the shares which would otherwise be unvested
on such date, and (B) the Option, to the extent unexercised and exercisable on
the date on which the Participant's Service terminated, may be exercised by the
Participant (or the Participant's guardian or legal representative) at any time
prior to the expiration of six (6) months after the date on which the
Participant's Service terminated, but in any event no later than the Option
Expiration Date. Notwithstanding the foregoing, if the Company's auditors
determine that the provisions or operation of the preceding sentence would cause
the Company to incur a compensation expense and provided further that in the
absence of the preceding sentence no such compensation expense would be
incurred, then the preceding sentence shall be without force or effect, and the
vesting and exercisability of each outstanding Option and any shares acquired


                                       13
<PAGE>   14

upon the exercise thereof shall be determined under any other applicable
provision of the Plan or the Option Agreement evidencing such Option.

                             (v) TERMINATION UPON TRANSFER TO NON-CONTROL
AFFILIATE. If at the request of the Company, Participant transfers Service to a
Non-Control Affiliate and the Participant's Service ceases as a result, then,
subject to the Participant's execution of a general release of claims form
reasonably satisfactory to the Company, the Option, to the extent unexercised
and exercisable on the date on which the Participant's Service terminated, may
be exercised by the Participant (or the Participant's guardian or legal
representative) at any time prior to the expiration of twelve (12) months after
the date on which the Participant's Service terminated, but in any event no
later than the Option Expiration Date.

                             (vi) TERMINATION AFTER CHANGE IN CONTROL. If the
Participant's Service ceases as a result of Termination After Change in Control
(as defined below), then (A) the exercisability and vesting of the Option and,
in the case of an immediately exercisable Option, any shares acquired upon the
exercise thereof shall be accelerated effective as of the date on which the
Participant's Service terminated, and (B) the Option, to the extent unexercised
and exercisable on the date on which the Participant's Service terminated, may
be exercised by the Participant (or the Participant's guardian or legal
representative) at any time prior to the expiration of six (6) months after the
date on which the Participant's Service terminated, but in any event no later
than the Option Expiration Date.

                             (vii) OTHER TERMINATION OF SERVICE. If the
Participant's Service with the Participating Company Group terminates prior to
Normal Retirement Age for any reason except Disability, death, Layoff, Transfer
to a Non-Control Affiliate, or Termination after Change in Control, the Option,
to the extent unexercised and exercisable by the Participant on the date on
which the Participant's Service terminates, may be exercised by the Participant
at any time prior to the expiration of thirty (30) days after the date on which
the Participant's Service terminates, but in any event no later than the Option
Expiration Date.

                      (b) EXTENSION IF EXERCISE PREVENTED BY LAW.
Notwithstanding the foregoing, other than termination for Cause, if the exercise
of an Option within the applicable time periods set forth in Section 6.5(a) is
prevented by the provisions of Section 10 below, the Option shall remain
exercisable until three (3) months after the date the Participant is notified by
the Company that the Option is exercisable, but in any event no later than the
Option Expiration Date.

                      (c) EXTENSION IF PARTICIPANT SUBJECT TO SECTION 16(b).
Notwithstanding the foregoing, other than termination for Cause, if a sale
within the applicable time periods set forth in Section 6.5(a) of shares
acquired upon the exercise of the Option would subject the Participant to suit
under Section 16(b) of the Exchange Act, the Option shall remain exercisable
until the earliest to occur of (i) the tenth (10th) day following the date on
which a sale of such shares by the Participant would no longer be subject to
such suit, (ii) the one hundred and ninetieth (190th) day after the
Participant's termination of Service, or (iii) the Option Expiration Date.


                                       14
<PAGE>   15

                      (d) CERTAIN DEFINITIONS.

                             (i) "CAUSE" shall mean any of the following: (1)
the Participant's theft, dishonesty, or falsification of any Participating
Company documents or records; (2) the Participant's improper use or disclosure
of a Participating Company's confidential or proprietary information; (3) any
action by the Participant which has a detrimental effect on a Participating
Company's reputation or business; (4) the Participant's failure or inability to
perform any reasonable assigned duties after written notice from a Participating
Company of, and a reasonable opportunity to cure, such failure or inability; (5)
any material breach by the Participant of any employment or service agreement
between the Participant and a Participating Company, which breach is not cured
pursuant to the terms of such agreement; (6) the Participant's conviction
(including any plea of guilty or nolo contendere) of any criminal act which
impairs the Participant's ability to perform his or her duties with a
Participating Company; or (7) violation of a material Company policy.

                             (ii) "GOOD REASON" shall mean any one or more of
the following:

                                    (1) without the Participant's express
written consent, the assignment to the Participant of any duties, or any
limitation of the Participant's responsibilities, substantially inconsistent
with the Participant's positions, duties, responsibilities and status with the
Participating Company Group immediately prior to the date of the Change in
Control;

                                    (2) without the Participant's express
written consent, the relocation of the principal place of the Participant's
employment or service to a location that is more than fifty (50) miles from the
Participant's principal place of employment or service immediately prior to the
date of the Change in Control, or the imposition of travel requirements
substantially more demanding of the Participant than such travel requirements
existing immediately prior to the date of the Change in Control;

                                    (3) any failure by the Participating Company
Group to pay, or any material reduction by the Participating Company Group of,
(A) the Participant's base salary in effect immediately prior to the date of the
Change in Control (unless reductions comparable in amount and duration are
concurrently made for all other employees of the Participating Company Group
with responsibilities, organizational level and title comparable to the
Participant's), or (B) the Participant's bonus compensation, if any, in effect
immediately prior to the date of the Change in Control (subject to applicable
performance requirements with respect to the actual amount of bonus compensation
earned by the Participant);

                                    (4) any failure by the Participating Company
Group to (A) continue to provide the Participant with the opportunity to
participate, on terms no less favorable than those in effect for the benefit of
any employee or service provider group which customarily includes a person
holding the employment or service provider position or a comparable position
with the Participating Company Group then held by the Participant, in any
benefit or compensation plans and programs, including, but not limited to, the
Participating Company Group's life, disability, health, dental, medical,
savings, profit sharing, stock purchase


                                       15
<PAGE>   16

and retirement plans, if any, in which the Participant was participating
immediately prior to the date of the Change in Control, or their equivalent, or
(B) provide the Participant with all other fringe benefits (or their equivalent)
from time to time in effect for the benefit of any employee group which
customarily includes a person holding the employment or service provider
position or a comparable position with the Participating Company Group then held
by the Participant;

                                    (5) any breach by the Participating Company
Group of any material agreement between the Participant and a Participating
Company concerning Participant's employment; or

                                    (6) any failure by the Company to obtain the
assumption of any material agreement between Participant and the Company
concerning Participant's employment by a successor or assign of the Company.

                             (iii) "LAYOFF" shall mean the involuntary
termination of the Participant's Service for reasons other than Cause,
constructive termination, death, or Disability.

                             (iv) "TERMINATION AFTER CHANGE IN CONTROL" shall
mean either of the following events occurring within twenty-four (24) months
after a Change in Control:

                                    (1) termination by the Participating Company
Group of the Participant's Service with the Participating Company Group for any
reason other than for Cause; or

                                    (2) the Participant's resignation for Good
Reason from all capacities in which the Participant is then rendering Service to
the Participating Company Group within a reasonable period of time following the
event constituting Good Reason.

Notwithstanding any provision herein to the contrary, Termination After Change
in Control shall not include any termination of the Participant's Service with
the Participating Company Group which (1) is for Cause; (2) is a result of the
Participant's death or Disability; (3) is a result of the Participant's
voluntary termination of Service other than for Good Reason; or (4) occurs prior
to the effectiveness of a Change in Control.

        7. STANDARD FORMS OF AGREEMENTS.

               7.1 OPTION AGREEMENT. Unless otherwise provided by the Board at
the time the Option is granted, an Option shall comply with and be subject to
the terms and conditions set forth in the form of Option Agreement approved by
the Board concurrently with its adoption of the Plan and as amended from time to
time.

               7.2 AUTHORITY TO VARY TERMS. The Board shall have the authority
from time to time to vary the terms of any standard form of agreement described
in this Section either in connection with the grant or amendment of an
individual Option or in connection with the authorization of a new standard form
or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of agreement are not inconsistent with
the terms of the Plan.


                                       16
<PAGE>   17

        8. CHANGE IN CONTROL. In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or other business
entity or parent thereof, as the case may be (the "ACQUIRING CORPORATION"), may,
without the consent of any Participant, either assume the Company's rights and
obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options for the Acquiring Corporation's stock. In the
event the Acquiring Corporation elects not to assume or substitute for
outstanding Options in connection with a Change in Control, the exercisability
and vesting of each such outstanding Option and any shares acquired upon the
exercise thereof held by Participants whose Service has not terminated prior to
such date shall be accelerated, effective as of the date ten (10) days prior to
the date of the Change in Control. The exercise or vesting of any Option and any
shares acquired upon the exercise thereof that was permissible solely by reason
of this Section and the provisions of such Option Agreement shall be conditioned
upon the consummation of the Change in Control. Any Options which are neither
assumed or substituted for by the Acquiring Corporation in connection with the
Change in Control nor exercised as of the date of the Change in Control shall
terminate and cease to be outstanding effective as of the date of the Change in
Control. Notwithstanding the foregoing, shares acquired upon exercise of an
Option prior to the Change in Control and any consideration received pursuant to
the Change in Control with respect to such shares shall continue to be subject
to all applicable provisions of the Option Agreement evidencing such Option
except as otherwise provided in such Option Agreement. Furthermore,
notwithstanding the foregoing, if the corporation the stock of which is subject
to the outstanding Options immediately prior to an Ownership Change Event
described in Section 2.1(u)(i) constituting a Change in Control is the surviving
or continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the outstanding Options
shall not terminate unless the Board otherwise provides in its discretion.

        9. TAX WITHHOLDING.

               9.1 TAX WITHHOLDING IN GENERAL. The Company shall have the right
to deduct from any and all payments made under the Plan, or to require the
Participant, through cash payment or otherwise, including by means of a Cashless
Exercise of an Option, to make adequate provision for, the federal, state, local
and foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to an Option or the shares acquired pursuant thereto.
The Company shall have no obligation to deliver shares of Stock or to release
shares of Stock from an escrow established pursuant to an Option Agreement until
the Participating Company Group's tax withholding obligations have been
satisfied by the Participant.

               9.2 WITHHOLDING IN SHARES. The Company shall have the right, but
not the obligation, to deduct from the shares of Stock issuable to a Participant
upon the exercise of an Option, or to accept from the Participant the tender of,
a number of whole shares of Stock having a Fair Market Value, as determined by
the Company, equal to all or any part of the tax withholding obligations of the
Participating Company Group. The Fair Market Value of any shares of Stock
withheld or tendered to satisfy any such tax withholding obligations shall not
exceed the amount determined by the applicable minimum statutory withholding
rates.


                                       17
<PAGE>   18

        10. COMPLIANCE WITH SECURITIES LAW.

               The grant of Options and the issuance of shares of Stock upon
exercise of Options shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities.
Options may not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
no Option may be exercised unless (A) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (B) in the opinion
of legal counsel to the Company, the shares issuable upon exercise of the Option
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of any
Option, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.

        11. TERMINATION OR AMENDMENT OF PLAN.

               The Board may terminate or amend the Plan at any time. However,
subject to changes in applicable law, regulations or rules that would permit
otherwise, without the approval of the Company's stockholders, there shall be
(A) no increase in the maximum aggregate number of shares of Stock that may be
issued under the Plan (except by operation of the provisions of Section 4.2),
(B) no change in the class of persons eligible to receive Incentive Stock
Options, and (C) no other amendment of the Plan that would require approval of
the Company's stockholders under any applicable law, regulation or rule. No
termination or amendment of the Plan shall affect any then outstanding Option
unless expressly provided by the Board. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding Option without
the consent of the Participant, unless such termination or amendment is required
to enable an Option designated as an Incentive Stock Option to qualify as an
Incentive Stock Option or is necessary to comply with any applicable law,
regulation or rule.

        12. MISCELLANEOUS PROVISIONS.

               12.1 REPURCHASE RIGHTS. Shares issued under the Plan may be
subject to a right of first refusal, one or more repurchase options, or other
conditions and restrictions as determined by the Board in its sole and absolute
discretion at the time the Option is granted. The Company shall have the right
to assign at any time any repurchase right it may have, whether or not such
right is then exercisable, to one or more persons as may be selected by the
Company. Upon request by the Company, each Participant shall execute any
agreement evidencing such transfer restrictions prior to the receipt of shares
of Stock hereunder and shall promptly present to the Company any and all
certificates representing shares of Stock acquired hereunder for the placement
on such certificates of appropriate legends evidencing any such transfer
restrictions.


                                       18
<PAGE>   19

               12.2 PROVISION OF INFORMATION. Each Participant shall be given
access to information concerning the Company equivalent to that information
generally made available to the Company's common stockholder.






                                       19

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.40
<SEQUENCE>3
<FILENAME>a71824ex10-40.txt
<DESCRIPTION>EXHIBIT 10.40
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.40

                             QUALCOMM INCORPORATED


                            STOCK OPTION GRANT NOTICE

QUALCOMM INCORPORATED (the "Company"), pursuant to its 2001 Stock Option Plan
(the "Plan") hereby grants to the Optionee named below a non-qualified stock
option to purchase the number of shares of the Company's common stock set forth
below. This non-qualified stock option is not intended to qualify for the
federal income tax benefits available to an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended. This
option is subject to all of the terms and conditions as set forth herein and the
Stock Option Agreement (attached hereto) and the Plan(1) which are incorporated
herein in their entirety.

<TABLE>
<S>                                                          <C>
Optionee/Emp #:  [[ First_Name ]] [[ Last_Name ]] #[[ ID ]]  Grant No.:  [[ Number ]]
Date of Grant:  [[ Option_Date ]]                            Shares Subject to Option: [[ Shares_Granted ]]
Exercise Price Per Share:  [[ Option_Price ]]                Expiration Date: [[ Expiration_Date_Period_1 ]]
</TABLE>

        VESTING SCHEDULE

<TABLE>
<CAPTION>
         Exercisable Shares             Full Vesting Date              Expiration Date
         ------------------             -----------------              ---------------
<S>                                   <C>                          <C>
     [[ Shares_Period_1 ]]            [[ Vest_Date_Period_1 ]]     [[ Expiration_Date_Period_1 ]]
    *[[ Shares_Period_2 ]]            [[ Vest_Date_Period_2 ]]     [[ Expiration_Date_Period_1 ]]
</TABLE>

  *These option shares vest on each monthly anniversary date after
  [[ Vest_Date_Period_1 ]] as to 1/60th of the total shares granted.

ADDITIONAL TERMS/ACKNOWLEDGMENTS: The undersigned Optionee acknowledges receipt
of, and represents that the Optionee has read, understands, accepts and agrees
to the terms of the following: this Grant Notice, the Stock Option Agreement and
the Plan (including, but not limited to, the binding arbitration provision in
Section 3.8 of the Plan). Optionee hereby accepts the Option subject to all of
its terms and conditions and further acknowledges that as of the Date of Grant,
this Grant Notice, the Stock Option Agreement and the Plan set forth the entire
understanding between Optionee and the Company regarding the acquisition of
stock in the Company and supersedes all prior oral and written agreements
pertaining to this particular option.

NOTE: THE OPTIONEE IS SOLELY RESPONSIBLE FOR ANY ELECTION TO EXERCISE THE
OPTION, AND THE COMPANY SHALL HAVE NO OBLIGATION WHATSOEVER TO PROVIDE NOTICE TO
THE OPTIONEE OF ANY MATTER, INCLUDING, BUT NOT LIMITED TO, THE DATE THE OPTION
TERMINATES.

QUALCOMM INCORPORATED:                     OPTIONEE:


By:_______________________________         ____________________________________
Richard Sulpizio                           Signature
President
Dated:  [[ Option_Date ]]                  Date:_______________________________

Attachment:       Stock Option Agreement (A9)


                                       1
<PAGE>   2

                              QUALCOMM INCORPORATED
                             STOCK OPTION AGREEMENT


        Pursuant to the Grant Notice and this Stock Option Agreement, QUALCOMM
Incorporated (the "Company") has granted you an Option to purchase the number of
shares of the Company's common stock ("Stock") indicated in the Grant Notice at
the exercise price indicated in the Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the QUALCOMM Incorporated
2001 Stock Option Plan (the "Plan") shall have the same definitions as in the
Plan.

        The details of this Option are as follows:

        1. VESTING. Except as otherwise provided in the Plan, this option will
vest as provided in the Grant Notice.

        2. EXERCISE OF THE OPTION.

               2.1 METHOD OF EXERCISE. You may exercise the vested portion of
this Option at any time prior to the expiration of the Option by delivering a
notice of exercise in such form as may be designated by the Company from time to
time together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours
and prior to the expiration of the Option, together with such additional
documents as the Company may then require pursuant to the terms of the Plan.

               2.2 METHOD OF PAYMENT. Payment of the exercise price may be by
cash (or check), or pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which, prior to the issuance of Stock,
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to a broker which provides for the payment of the
aggregate exercise price to the Company, or a combination of the above methods,
as the Company may designate from time to time.

               2.3 TAX WITHHOLDING. By exercising this Option you agree that as
a condition to any exercise of this Option, the Company may withhold from your
pay and any other amounts payable to you, or require you to enter an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of this Option;
(2) the lapse of any substantial risk of forfeiture to which the Stock is
subject at the time of exercise; or (3) the disposition of Stock acquired upon
such exercise.

               2.4 RESPONSIBILITY FOR EXERCISE. You are responsible for taking
any and all actions as may be required to exercise this Option in a timely
manner and for properly executing any such documents as may be required for
exercise in accordance with such rules and procedures as may be established from
time to time. By signing this Agreement you acknowledge that information
regarding the procedures and requirements for this exercise of the Option is
available to you on request. The Company shall have no duty or obligation to
notify you of the expiration date of this Option.


                                       2
<PAGE>   3

        3. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this Option may not be exercised unless the Stock issuable
upon exercise of this Option is then registered under the Securities Act or, if
such Stock is not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.

        4. TERMINATION OF THE OPTION. The term of this Option commences on the
Date of Grant (as specified in the Grant Notice) and expires and shall no longer
be exercisable upon the earliest of:

                      (a) the Expiration Date indicated in the Grant Notice;

                      (b) the tenth (10th) anniversary of the Date of Grant;

                      (c) the last day for exercising the Option following
termination of your Service as described in the Plan; or

                      (d) a Change of Control, to the extent provided in the
Plan.

        5. OPTION NOT A SERVICE CONTRACT. This Option is not an employment or
service contract and nothing in this Stock Option Agreement , the Grant Notice
or the Plan shall be deemed to create in any way whatsoever any obligation on
your part to continue in the service of the Company, or of the Company to
continue your service with the Company. In addition, nothing in your Option
shall obligate the Company, its stockholders, Board, Officers or Employees to
continue any relationship which you might have as a Director or Consultant for
the Company.

        6. NOTICES. Any notices provided for in this Stock Option Agreement, the
Grant Notice or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by the
Company to you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the last address you provided to the Company.

        7. ARBITRATION. Any dispute or claim concerning any Options granted (or
not granted) pursuant to the Plan and any other disputes or claims relating to
or arising out of the Plan shall be fully, finally and exclusively resolved by
binding arbitration conducted by the American Arbitration Association pursuant
to the commercial arbitration rules in San Diego, California. By accepting an
Option, Participants and the Company waive their respective rights to have any
such disputes or claims tried by a judge or jury.

        8. AMENDMENT. The Board may amend your Option at any time, provided no
such amendment may adversely affect the Option or any unexercised portion of
your Option, without your consent unless such amendment is necessary to comply
with any applicable law or government regulation. No amendment or addition to
this Stock Option Agreement shall be effective unless in writing or, in such
electronic form as may be designated by the Company.

        9. GOVERNING PLAN DOCUMENT. Your Option is subject to this Stock Option
Agreement, the Grant Notice and all the provisions of the Plan, the provisions
of which are


                                        3
<PAGE>   4

hereby made a part of this Stock Option Agreement, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of this Stock Option Agreement, the Grant Notice and
those of the Plan, the provisions of the Plan shall control.






                                       4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.41
<SEQUENCE>4
<FILENAME>a71824ex10-41.txt
<DESCRIPTION>EXHIBIT 10.41
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.41

                             QUALCOMM INCORPORATED
                        2001 EMPLOYEE STOCK PURCHASE PLAN

        1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

               1.1 ESTABLISHMENT. The QUALCOMM Incorporated 2001 Employee Stock
Purchase Plan (the "PLAN") is hereby established effective as of February 27,
2001 (the "EFFECTIVE DATE"), subject to the approval by Company shareholders.

               1.2 PURPOSE. The purpose of the Plan is to advance the interests
of Company and its stockholders by providing an incentive to attract, retain and
reward Eligible Employees of the Participating Company Group and by motivating
such persons to contribute to the growth and profitability of the Participating
Company Group. The Plan provides such Eligible Employees with an opportunity to
acquire a proprietary interest in the Company through the purchase of Stock. The
Company intends that the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Code (including any amendments or replacements of such
section), and the Plan shall be so construed.

               1.3 TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued.

        2. DEFINITIONS AND CONSTRUCTION.

               2.1 DEFINITIONS. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same definition
herein. Whenever used herein, the following terms shall have their respective
meanings set forth below:

                      (a) "BOARD" means the Board of Directors of the Company.
If one or more Committees have been appointed by the Board to administer the
Plan, "BOARD" also means such Committee(s).

                      (b) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                      (c) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                      (d) "COMPANY" means QUALCOMM Incorporated, a Delaware
corporation, or any Successor.

                      (e) "COMPENSATION" means, with respect to any Offering
Period, all salary, wages (including amounts elected to be deferred by the
employee, that would otherwise


                                       1
<PAGE>   2

have been paid, under any cash or deferred arrangement established by the
Company) and overtime pay, but excluding commissions, bonuses, payments under
the 2-for 1 vacation program, profit sharing, the cost of employee benefits paid
for by the Company, education or tuition reimbursements, imputed income arising
under any Company group insurance or benefit program, traveling expenses,
business and moving expense reimbursements, income received in connection with
stock options, contributions made by the Company under any employee benefit
plan, and similar items of compensation. Compensation shall also include
payments while on a leave of absence during which participation continues
pursuant to Section 2.1(g) to such extent as may be provided by the Company's
leave policy.

                      (f) "ELIGIBLE EMPLOYEE" means an Employee who meets the
requirements set forth in Section 5 for eligibility to participate in the Plan.

                      (g) "EMPLOYEE" means a person treated as an employee of a
Participating Company for purposes of Section 423 of the Code. A Participant
shall be deemed to have ceased to be an Employee either upon an actual
termination of employment or upon the corporation employing the Participant
ceasing to be a Participating Company. For purposes of the Plan, an individual
shall not be deemed to have ceased to be an Employee while on any military leave
or other leave of absence approved by the Company of ninety (90) days or less.
If an individual's leave of absence exceeds ninety (90) days, the individual
shall be deemed to have ceased to be an Employee on the ninety-first (91st) day
of such leave unless the individual's right to reemployment with the
Participating Company Group is guaranteed either by statute or by contract.

                      (h) "FAIR MARKET VALUE" means, as of any date:

                             (i) If the Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of a share of Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or if the stock is traded on more than one exchange or
market, the exchange or market with the greatest volume of trading in the Stock)
on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable. In the
absence of such markets for the Stock, the Fair Market Value shall be determined
in good faith by the Board.

                             (ii) For purposes of this Plan, if the date as of
which the Fair Market Value is to be determined is not a market trading day,
then solely for the purpose of determining Fair Market Value such date shall be:
(A) in the case of the Offering Date, the first market trading day following the
Offering Date; (B) in the case of the Purchase Date, the last market trading day
prior to the Purchase Date.

                      (i) "OFFERING" means an offering of Stock as provided in
Section 6.

                      (j) "OFFERING DATE" means, for any Offering, the first day
of the Offering Period.

                      (k) "OFFERING PERIOD" means a period established in
accordance with Section 6.


                                       2
<PAGE>   3

                      (l) "PARENT CORPORATION" means any present or future
"parent corporation" of the Company, as defined in Section 424(e) of the Code.

                      (m) "PARTICIPANT" means an Eligible Employee who has
become a participant in an Offering Period in accordance with Section 7 and
remains a participant in accordance with the Plan.

                      (n) "PARTICIPATING COMPANY" means the Company and any
Parent Corporation or Subsidiary Corporation designated by the Board as a
corporation the Employees of which may, if Eligible Employees, participate in
the Plan. The Board shall have the sole and absolute discretion to determine
from time to time which Parent Corporations or Subsidiary Corporations shall be
Participating Companies.

                      (o) "PARTICIPATING COMPANY GROUP" means, at any point in
time, the Company and all other corporations collectively which are then
Participating Companies.

                      (p) "PRIOR PLAN PURCHASE RIGHT" means, a purchase right
granted under the Company's 1991 Employee Stock Purchase Plan which is
outstanding on or after the date on which the Board adopts the Plan.

                      (q) "PURCHASE DATE" means, for any Offering, the last day
of the Offering Period; provided, however, that the Board in its discretion may
establish one or more additional Purchase Dates during any Offering Period.

                      (r) "PURCHASE PRICE" means the price at which a share of
Stock may be purchased under the Plan, as determined in accordance with Section
9.

                      (s) "PURCHASE RIGHT" means an option granted to a
Participant pursuant to the Plan to purchase such shares of Stock as provided in
Section 8, which the Participant may or may not exercise during the Offering
Period in which such option is outstanding. Such option arises from the right of
a Participant to withdraw any accumulated payroll deductions of the Participant
not previously applied to the purchase of Stock under the Plan and to terminate
participation in the Plan during an Offering Period, in accordance with such
rules and procedures as may be established by Board.

                      (t) "SPINOFF TRANSACTION" means a transaction in which the
voting stock of an entity in the Participating Company Group is distributed to
the shareholders of a parent corporation as defined by Section 424(e) of the
Code, of such entity.

                      (u) "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.

                      (v) "SUBSCRIPTION AGREEMENT" means an agreement in such
form as specified by the Company which is delivered in written form or by
communicating with the Company in such other manner as the Company may
authorize, stating an Employee's election to participate in the Plan and
authorizing payroll deductions under the Plan from the Employee's Compensation.


                                       3
<PAGE>   4

                      (w) "SUBSCRIPTION DATE" means the Offering Date of an
Offering Period, or such earlier date as the Company shall establish.

                      (x) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

                      (y) "SUCCESSOR" means a corporation into or with which the
Company is merged or consolidated or which acquires all or substantially all of
the assets of the Company and which is designated by the Board as a Successor
for purpose of the Plan.

               2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

        3. ADMINISTRATION.

               3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered
by the Board and its designees. Subject to the provisions of the Plan, the Board
shall determine all of the relevant terms and conditions of Purchase Rights;
provided, however, that all Participants granted Purchase Rights pursuant to an
Offering shall have the same rights and privileges within the meaning of Section
423(b)(5) of the Code in such Offering. All expenses incurred in connection with
the administration of the Plan shall be paid by the Company.

               3.2 AUTHORITY OF OFFICERS. Any officer of the Company shall have
the authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election that is the responsibility of or that is
allocated to the Company herein, provided that the officer has actual authority
with respect to such matter, right, obligation, determination or election. Any
decision or determination of the Company made by an Officer having actual
authority with respect thereto, shall be final, binding and conclusive on the
Participating Company Group, any Participant, and all persons having an interest
in the Plan, or any Option granted hereunder, unless such Officer's decision or
determination is arbitrary or capricious, fraudulent, or made in bad faith.

               3.3 POLICIES AND PROCEDURES ESTABLISHED BY THE COMPANY. The
Company may, from time to time, consistent with the Plan and the requirements of
Section 423 of the Code, establish, interpret change or terminate such rules,
guidelines, policies, procedures, limitations, or adjustments as deemed
advisable by the Company, in its discretion, for the proper administration of
the Plan, including, without limitation, (a) a minimum payroll deduction amount
required for participation in an Offering, (b) a limitation on the frequency or
number of changes permitted in the rate of payroll deduction during an Offering,
(c) an exchange ratio applicable to amounts withheld in a currency other than
United States dollars, (d) a payroll deduction greater than or less than the
amount designated by a Participant in order to adjust for the Company's delay or
mistake in processing a Subscription Agreement or in otherwise effecting a
Participant's election under the Plan or as advisable to comply with the
requirements


                                       4
<PAGE>   5

of Section 423 of the Code, and (e) determination of the date and manner by
which the Fair Market Value of a share of Stock is determined for purposes of
administration of the Plan.

        The Board's determination of the construction and interpretation of any
provision of the Plan, and any actions taken, and any decisions or
determinations made pursuant to the terms of the Plan, shall be final, binding
and conclusive on the Participating Company Group, any Participant, and any
person having an interest in the Plan or any Option granted hereunder unless the
Board's action, decision or determination is arbitrary or capricious,
fraudulent, or made in bad faith.

               3.4 INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or Officers or
Employees of the Participating Company Group, members of the Board and any
Officers or Employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same and to retain complete control over the litigation and/or
settlement of such suit, action or proceeding.

        4. SHARES SUBJECT TO PLAN.

               4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be Twelve Million, Nine Hundred and Eight
Thousand, Three Hundred and Nine (12,908,309), less the number of shares issued
pursuant to exercise of a Prior Plan Purchase Right, and shall consist of
authorized but unissued or reacquired shares of Stock, or any combination
thereof. If an outstanding Purchase Right or Prior Plan Purchase Right for any
reason expires or is terminated or canceled, the shares of Stock allocable to
the unexercised portion of that Purchase Right or Prior Plan Purchase Right
shall again be available for issuance under the Plan.

               4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, or in the event of any merger (including a merger effected for the
purpose of changing the Company's domicile), sale of assets or other
reorganization in which the Company is a party, appropriate adjustments shall be
made in the number and class of shares subject to the Plan, each Purchase Right,
and in the Purchase Price. If a majority of the shares of the same class as the
shares subject to outstanding Purchase Rights are exchanged for, converted into,
or otherwise become (whether or not pursuant to an


                                       5
<PAGE>   6

Ownership Change Event) shares of another corporation (the "NEW SHARES"), the
Board may unilaterally amend the outstanding Purchase Rights to provide that
such Purchase Rights are exercisable for New Shares. In the event of any such
amendment, the number of shares subject to, and the Purchase Price of, the
outstanding Purchase Rights shall be adjusted in a fair and equitable manner, as
determined by the Board, in its discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 4.2 shall
be rounded down to the nearest whole number, and in no event may the Purchase
Price be decreased to an amount less than the par value, if any, of the stock
subject to the Purchase Right.

        5. ELIGIBILITY.

               5.1 EMPLOYEES ELIGIBLE TO PARTICIPATE. Each Employee of a
Participating Company is eligible to participate in the Plan and shall be deemed
an Eligible Employee, except any Employee who is either: (a) customarily
employed by the Participating Company Group for twenty (20) hours or less per
week (b) customarily employed by the Participating Company Group for not more
than five (5) months in any calendar year or (c) has not completed thirty (30)
days of service with a Participating Company, or such other service requirement,
up to a maximum of 2 years, which the Board may require.

               5.2 EXCLUSION OF CERTAIN STOCKHOLDERS. Notwithstanding any
provision of the Plan to the contrary, no Employee shall be treated as an
Eligible Employee and granted a Purchase Right under the Plan if, immediately
after such grant, the Employee would own or hold options to purchase stock of
the Company or of any Parent Corporation or Subsidiary Corporation possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of such corporation, as determined in accordance with Section
423(b)(3) of the Code. For purposes of this Section 5.2, the attribution rules
of Section 424(d) of the Code shall apply in determining the stock ownership of
such Employee.

               5.3 DETERMINATION BY COMPANY. The Company shall determine in good
faith and in the exercise of its discretion whether an individual has become or
has ceased to be an Employee or an Eligible Employee and the effective date of
such individual's attainment or termination of such status, as the case may be.
For purposes of an individual's eligibility to participate in or other rights,
if any, under the Plan as of the time of the Company's determination, all such
determinations by the Company shall be final, binding and conclusive, unless the
Company's determination is arbitrary or capricious, fraudulent, or made in bad
faith notwithstanding that the Company or any court of law or governmental
agency subsequently makes a contrary determination.

        6. OFFERINGS.

               The Plan shall be implemented by sequential Offerings of
approximately six (6) months duration or such other duration as the Board shall
determine (an "OFFERING PERIOD"); provided, however, that the first Offering
Period (the "INITIAL OFFERING PERIOD") shall commence on July 1, 2001 and end on
March 31, 2002. Subsequent Offering Periods shall commence on or about April 1
and October 1 of each year and end on or about the next September 30 and March
31, respectively, occurring thereafter. Notwithstanding the foregoing, the
Board, in its sole and absolute discretion, may establish a different duration
for one or more Offering Periods


                                       6
<PAGE>   7

or different commencing or ending dates for such Offering Periods including the
Initial Offering Period; provided, however, that no Offering Period may have a
duration exceeding twenty-seven (27) months.

        7. PARTICIPATION IN THE PLAN.

               7.1 INITIAL PARTICIPATION. An Eligible Employee may become a
Participant in an Offering Period by delivering a properly completed
Subscription Agreement, in accordance with such rules and procedures as may be
specified by the Company. An Eligible Employee who does not deliver a properly
completed Subscription Agreement to the Company in the required time period
shall not participate in the Plan for that Offering Period. Furthermore, the
Eligible Employee may not participate in a subsequent Offering Period unless a
properly completed Subscription Agreement is delivered to the Company on or
before the Subscription Date for such subsequent Offering Period.

               7.2 CONTINUED PARTICIPATION. A Participant shall automatically
participate in the next Offering Period commencing immediately after the
Purchase Date of each Offering Period in which the Participant participates
provided that the Participant remains an Eligible Employee on the Offering Date
of the new Offering Period and has not either (a) withdrawn from the Plan
pursuant to Section 12.1 or (b) terminated employment as provided in Section 13.
A Participant who may automatically participate in a subsequent Offering Period,
as provided in this Section, is not required to deliver any additional
Subscription Agreement for the subsequent Offering Period in order to continue
participation in the Plan. However, a Participant may deliver a new Subscription
Agreement for a subsequent Offering Period in accordance with the procedures set
forth in Section 7.1 if the Participant desires to change any of the elections
contained in the Participant's then effective Subscription Agreement.

        8. RIGHT TO PURCHASE SHARES.

               8.1 GRANT OF PURCHASE RIGHT.

                             (i) Except as set forth below (or as otherwise
specified by the Board prior to the Offering Date), on the Offering Date of each
Offering Period, each Participant in that Offering Period shall be granted
automatically a Purchase Right consisting of an option to purchase that number
of whole shares of Stock determined by either dividing fifteen percent (15%) of
such Participant's Compensation during the Offering Period by the Purchase Price
of a share of Stock for such Offering Period or by dividing Twelve Thousand Five
Hundred Dollars ($12,500) by the Fair Market Value of a share of Stock on such
Offering Date, whichever is less. In connection with any Offering made under
this Plan, the Board or the Committee may specify a maximum number of shares of
Common Stock which may be purchased by any employee as well as a maximum
aggregate number of shares of Common Stock which may be purchased by all
eligible employees pursuant to such Offering. In addition, in connection with
any Offering which contains more than one Purchase Date, the Board or the
Committee may specify a maximum aggregate number of shares which may be
purchased by all eligible employees on any given Purchase Date under the
Offering.


                                       7
<PAGE>   8

                             (ii) Notwithstanding the foregoing, the aggregate
number of shares for which Purchase Rights may be granted in any Offering Period
may not exceed the maximum number of shares which have been, prior to the
Offering Date for such Offering Period, reserved for the Plan and approved by
the stockholders of the Company and not previously been purchased upon the
exercise of Purchase Rights in any prior Offering Period.

                             (iii) If the aggregate purchase of shares of Common
Stock upon exercise of rights granted under the Offering would exceed any such
maximum aggregate number, the Board or the Committee shall make a pro rata
allocation of the shares of Common Stock available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable. No Purchase Right
shall be granted on an Offering Date to any person who is not, on such Offering
Date, an Eligible Employee.

               8.2 SUBSTITUTION OF RIGHTS. The grant of rights under an Offering
may be done to carry out the substitution of rights under the Plan for
pre-existing rights granted under another employee stock purchase plan, if such
substitution is pursuant to a transaction described in Section 424(a) of the
Code (or any successor provision thereto) and the characteristics of such
substitute rights conform to the requirements of Section 424(a) of the Code (or
any successor provision thereto) and will not cause the disqualification of this
Plan under Section 423 of the Code. Notwithstanding the other terms of the Plan,
such substitute rights shall have the same characteristics as the
characteristics associated with such pre-existing rights, including, but not
limited to, the following:

                             (i) the date on which such pre-existing right was
granted shall be the "Offering Date" of such substitute right for purposes of
determining the date of grant of the substitute right;

                             (ii) the Offering (as defined below) for such
substitute right shall begin on its Offering Date and end coincident on the
applicable Purchase Date, but no later than the end of the offering (as
determined under the terms of such offering) under which the pre-existing right
was granted.

               8.3 PRO RATA ADJUSTMENT OF PURCHASE RIGHT. If the Board
establishes an Offering Period of any duration other than six months, then any
limitation on the number of shares of Stock subject to each Purchase Right
granted on the Offering Date of such Offering Period set forth in Section 8.1(i)
shall be prorated based upon the ratio which the number of months in such
Offering Period bears to six (6).

               8.4 CALENDAR YEAR PURCHASE LIMITATION. Notwithstanding any
provision of the Plan to the contrary, no Participant shall be granted a
Purchase Right which permits his or her right to purchase shares of Stock under
the Plan to accrue at a rate which, when aggregated with such Participant's
rights to purchase shares under all other employee stock purchase plans of a
Participating Company intended to meet the requirements of Section 423 of the
Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market Value (or
such other limit, if any, as may be imposed by the Code) for each calendar year
in which such Purchase Right is outstanding at any time. For purposes of the
preceding sentence, the Fair Market Value of shares purchased during a given
Offering Period shall be determined as of the Offering Date for such


                                       8
<PAGE>   9

Offering Period. The limitation described in this Section shall be applied in
conformance with applicable regulations under Section 423(b)(8) of the Code.

        9. PURCHASE PRICE.

               The Purchase Price for an Offering Period shall be eighty-five
percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on
the Offering Date of the Offering Period, or (b) the Fair Market Value of a
share of Stock on the Purchase Date. Notwithstanding the foregoing, the Board,
in its sole discretion, may establish the Purchase Price at which each share of
Stock may be acquired in an Offering Period upon the exercise of all or any
portion of a Purchase Right; provided, however, that the Purchase Price shall
not be less than eighty-five percent (85%) of the lesser of (a) the Fair Market
Value of a share of Stock on the Offering Date of the Offering Period or (b) the
Fair Market Value of a share of Stock on the Purchase Date.

        10. ACCUMULATION OF PURCHASE PRICE THROUGH PAYROLL DEDUCTION.

               Shares of Stock acquired pursuant to the exercise of all or any
portion of a Purchase Right may be paid for only by means of payroll deductions
from the Participant's Compensation accumulated during the Offering Period for
which such Purchase Right was granted, and, if a payroll deduction is not
permitted under a statute, regulation, rule of a jurisdiction, or is not
administratively feasible, such other payments as may be approved by the
Company, subject to the following:

               10.1 AMOUNT OF PAYROLL DEDUCTIONS. Except as otherwise provided
herein, the amount to be deducted under the Plan from a Participant's
Compensation on each payday during an Offering Period shall be determined by the
Participant's Subscription Agreement. The Subscription Agreement shall set forth
the percentage of the Participant's Compensation to be deducted on each payday
during an Offering Period in whole percentages, up to fifteen percent (15%). The
Board may change the foregoing limits on payroll deductions effective as of any
Offering Date.

               10.2 COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll deductions shall
commence on the first payday following the Offering Date and shall continue
through the last payday prior to the end of the Offering Period unless sooner
altered or terminated as provided herein.

               10.3 ELECTION TO CHANGE OR STOP PAYROLL DEDUCTIONS. During an
Offering Period, to the extent provided for in the Offering, a Participant may
elect to decrease the rate of or to stop deductions from his or her Compensation
by delivering to the Company an amended Subscription Agreement, in such form and
manner as specified by the Company, authorizing such change on or before the
Change Notice Date, as defined below. A Participant who elects, effective
following the first payday of an Offering Period, to decrease the rate of his or
her payroll deductions to zero percent (0%) shall nevertheless remain a
Participant in the current Offering Period unless such Participant withdraws
from the Plan as provided in Section 12.1. The "CHANGE NOTICE DATE" shall be the
day established in accordance with procedures established by the Company.


                                       9
<PAGE>   10

               10.4 COMPANY'S HOLDING OF DEDUCTION. All payroll deductions from
a Participant's Compensation shall be deposited with the general funds of the
Company. All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose. Interest shall not be paid on sums
deducted from a Participant's Compensation pursuant to the Plan.

               10.5 VOLUNTARY WITHDRAWAL OF DEDUCTIONS. A Participant may
withdraw payroll deductions credited to the Plan and not previously applied
toward the purchase of Stock only as provided in Section 12.1.

        11. PURCHASE OF SHARES.

               11.1 EXERCISE OF PURCHASE RIGHT. On each Purchase Date, each
Participant's accumulated payroll deductions and other additional payments
specifically permitted by the Plan (without any increase for interest), will be
applied to the purchase of whole shares of Stock, up to the maximum number of
shares permitted pursuant to the terms of the Plan and the applicable Offering,
at the Purchase Price for such Offering. No fractional shares shall be issued
upon the exercise of Purchase Rights granted under the Plan. The amount, if any,
of each Participant's accumulated payroll deductions remaining after the
purchase of shares which is less than the amount required to purchase one share
of Stock on the final Purchase Date of an Offering shall be retained in each
such Participant's account for the purchase of shares under the next Offering
under the Plan, unless such Participant withdraws from such next Offering, as
provided in Section 12.1, or is no longer eligible to be granted rights under
the Plan, as provided in Section 5, in which case such amount shall be
distributed to the Participant after said final Purchase Date, without interest.
The amount, if any, of each Participant's accumulated payroll deductions
remaining after the purchase of shares which is equal to the amount required to
purchase whole shares of Stock on the final Purchase Date of an Offering shall
be refunded in full to the Participant after such Purchase Date, without
interest.

               11.2 PRO RATA ALLOCATION OF SHARES. If the number of shares of
Stock which might be purchased by all Participants in the Plan on a Purchase
Date exceeds the number of shares of Stock available in the Plan as provided in
Section 4.1, the Company shall make a pro rata allocation of the remaining
shares in as uniform a manner as practicable and as the Company determines to be
equitable. Any fractional share resulting from such pro rata allocation to any
Participant shall be disregarded.

               11.3 DELIVERY OF SHARES. As soon as practicable after each
Purchase Date, the Company shall arrange the delivery to each Participant of the
shares acquired by the Participant on such Purchase Date; provided that the
Company may deliver such shares to a broker designated by the Company that will
hold such shares for the benefit of the Participant. Shares to be delivered to a
Participant under the Plan shall be registered, or held in an account, in the
name of the Participant, or, if requested by the Participant, such other name or
names as the Company may permit under rules established for the operation and
administration of the Plan.

               11.4 TAX WITHHOLDING. At the time a Participant's Purchase Right
is exercised, in whole or in part, or at the time a Participant disposes of some
or all of the shares of Stock he or she acquires under the Plan, the Participant
shall make adequate provision for the


                                       10
<PAGE>   11

federal, state, local and foreign tax withholding obligations, if any, of the
Participating Company Group which arise upon exercise of the Purchase Right or
upon such disposition of shares, respectively. The Participating Company Group
may, but shall not be obligated to, withhold from the Participant's compensation
the amount necessary to meet such withholding obligations.

               11.5 EXPIRATION OF PURCHASE RIGHT. A Purchase Right shall expire
immediately upon the end of the Offering Period to the extent it exceeds the
number of shares of Stock which are purchased with a Participant's accumulated
payroll deductions or other permitted contribution during any Offering Period.

               11.6 PROVISION OF REPORTS AND STOCKHOLDER INFORMATION TO
PARTICIPANTS. Each Participant who has exercised all or part of his or her
Purchase Right shall receive, as soon as practicable after the Purchase Date, a
report of such Participant's account setting forth the total payroll deductions
accumulated prior to such exercise, the number of shares of Stock purchased, the
Purchase Price for such shares, the date of purchase and the cash balance, if
any, remaining immediately after such purchase that is to be refunded or
retained on behalf of the Participant pursuant to Section 11.1. The report
required by this Section may be delivered in such form and by such means,
including by electronic transmission, as the Company may determine. In addition,
each Participant shall be given access to information concerning the Company
equivalent to that information provided generally to the Company's common
stockholders.

        12. WITHDRAWAL FROM PLAN.

               12.1 VOLUNTARY WITHDRAWAL FROM THE PLAN. A Participant may
withdraw from the Plan by signing and delivering to the Company's designated
office a written notice of withdrawal on a form provided by the Company for this
purpose or by communicating with the Company in such other manner as the Company
may authorize. A Participant who voluntarily withdraws from the Plan is
prohibited from resuming participation in the Plan in the same Offering from
which he or she withdrew, but may participate in any subsequent Offering by
again satisfying the requirements of Sections 5 and 7.1. The Company may impose,
from time to time, a requirement that the notice of withdrawal from the Plan be
on file with the Company's designated office for a reasonable period prior to
the effectiveness of the Participant's withdrawal.

               12.2 RETURN OF PAYROLL DEDUCTIONS. Upon a Participant's voluntary
withdrawal from the Plan pursuant to Section 12.1, the Participant's accumulated
payroll deductions which have not been applied toward the purchase of shares
shall be refunded to the Participant as soon as practicable after the
withdrawal, without the payment of any interest, and the Participant's
participation in the Plan shall terminate. Such accumulated payroll deductions
to be refunded in accordance with this Section may not be applied to any other
Offering under the Plan.

        13. TERMINATION OF EMPLOYMENT OR ELIGIBILITY.

               13.1 Upon a Participant's ceasing, prior to a Purchase Date, to
be an Employee of the Participating Company Group for any reason, or upon the
failure of a Participant to remain


                                       11
<PAGE>   12

an Eligible Employee, the Participant's participation in the Plan shall
terminate immediately, except as otherwise provided in Section 2.1(g) and
Section 13.3.

               13.2 Upon termination of participation, the terminated
Participant's accumulated payroll deductions which have not been applied toward
the purchase of shares shall, as soon as practicable, be returned to the
Participant or, in the case of the Participant's death, to the Participant's
legal representative, and all of the Participant's rights under the Plan shall
terminate. Interest shall not be paid on sums returned pursuant to this Section
13. A Participant whose participation has been so terminated may again become
eligible to participate in future Offerings under the Plan by satisfying the
requirements of Sections 5 and 7.1.

               13.3 Upon a Participant's ceasing, prior to a Purchase Date, to
be an Employee of the Participating Company Group for any reason, or upon the
failure of a Participant to remain an Eligible Employee, the Participant's
participation in the Plan shall continue, subject to the Participant's execution
of a general release of claims satisfactory to the Company, for an additional
ninety (90) days; provided, however, this Section shall not apply in the event
of the Participant's death, a Spinoff Transaction, or to any Participant on a
leave of absence governed by Section 2.1(g).

        14. CHANGE IN CONTROL.

               14.1 DEFINITIONS.

                      (a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or
substantially all, as determined by the Board in its sole discretion, of the
assets of the Company; or (iv) a liquidation or dissolution of the Company.

                      (b) A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, a
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 14.1(a)(iii), the corporation or other business entity to
which the assets of the Company were transferred (the "TRANSFEREE"), as the case
may be. The Board shall determine in its sole discretion whether multiple sales
or exchanges of the voting securities of the Company or multiple Ownership
Change Events are related. Notwithstanding the preceding sentence, a Change in
Control shall not include any Transaction in which the voting stock of an entity
in the Participating Company Group is distributed to the shareholders of a
parent corporation, as defined in Section 424(e) of the Code, of such entity.
Any Ownership Change resulting from an underwritten public offering of the
Company's Stock or the stock of any Participating Company shall not be deemed a
Change in Control for any purpose hereunder.


                                       12
<PAGE>   13

               14.2 EFFECT OF CHANGE IN CONTROL ON PURCHASE RIGHTS. In the event
of a Change in Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may assume the Company's rights and obligations under the Plan.
If the Acquiring Corporation elects not to assume the Company's rights and
obligations under outstanding Purchase Rights, the Purchase Date of the then
current Offering Period shall be accelerated to a date before the date of the
Change in Control specified by the Board, but the number of shares of Stock
subject to outstanding Purchase Rights shall not be adjusted. All Purchase
Rights which are neither assumed by the Acquiring Corporation in connection with
the Change in Control nor exercised as of the date of the Change in Control
shall terminate and cease to be outstanding effective as of the date of the
Change in Control.

        15. NONTRANSFERABILITY OF PURCHASE RIGHTS.

               Neither payroll deductions nor a Participant's Purchase Right may
be assigned, transferred, pledged or otherwise disposed of in any manner other
than as provided by the Plan or by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw from the Plan as provided in Section 12.1. A Purchase Right shall be
exercisable during the lifetime of the Participant only by the Participant.

        16. COMPLIANCE WITH SECURITIES LAW.

               The issuance of shares under the Plan shall be subject to
compliance with all applicable requirements of federal, state and foreign law
with respect to such securities. A Purchase Right may not be exercised if the
issuance of shares upon such exercise would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any securities exchange or market system upon which the
Stock may then be listed. In addition, no Purchase Right may be exercised unless
(a) a registration statement under the Securities Act of 1933, as amended, shall
at the time of exercise of the Purchase Right be in effect with respect to the
shares issuable upon exercise of the Purchase Right, or (b) in the opinion of
legal counsel to the Company, the shares issuable upon exercise of the Purchase
Right may be issued in accordance with the terms of an applicable exemption from
the registration requirements of said Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares under the Plan shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of a
Purchase Right, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation, and to make any representation or warranty
with respect thereto as may be requested by the Company.

        17. RIGHTS AS A STOCKHOLDER AND EMPLOYEE.

               A Participant shall have no rights as a stockholder by virtue of
the Participant's participation in the Plan until the date of the issuance of
shares purchased pursuant to the


                                       13
<PAGE>   14

exercise of the Participant's Purchase Right (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such share is issued,
except as provided in Section 4.2. Nothing herein shall confer upon a
Participant any right to continue in the employ of the Participating Company
Group or interfere in any way with any right of the Participating Company Group
to terminate the Participant's employment at any time.

        18. DISTRIBUTION ON DEATH.

               If a Participant dies, the Company shall deliver any shares or
cash credited to the Participant to the Participant's legal representative.

        19. NOTICES.

               All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

        20. AMENDMENT OR TERMINATION OF THE PLAN.

               The Board may at any time amend or terminate the Plan, except
that (a) such termination shall not affect Purchase Rights previously granted
under the Plan, except as permitted under the Plan, and (b) no amendment may
adversely affect a Purchase Right previously granted under the Plan (except to
the extent permitted by the Plan or as may be necessary to qualify the Plan as
an employee stock purchase plan pursuant to Section 423 of the Code or to obtain
qualification or registration of the shares of Stock under applicable federal,
state or foreign securities laws). In addition, an amendment to the Plan must be
approved by the stockholders of the Company within twelve (12) months of the
adoption of such amendment if such amendment would increase the maximum
aggregate number of shares of Stock that may be issued under the Plan (except by
operation of the provisions of Section 4.1 or Section 4.2) or would change the
definition of the corporations that may be designated by the Board as
Participating Companies.


                                       14
<PAGE>   15

                                  PLAN HISTORY


____________, 2000    Board adopts Plan, with an initial reserve of 12,908,309
                      shares.

____________, 2001    Stockholders approve Plan.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.42
<SEQUENCE>5
<FILENAME>a71824ex10-42.txt
<DESCRIPTION>EXHIBIT 10.42
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.42

                             QUALCOMM INCORPORATED
                 2001 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN


        1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

               1.1 ESTABLISHMENT. The QUALCOMM Incorporated 2001 Non-Employee
Directors' Stock Option Plan (the "PLAN") is hereby established effective as of
February 27, 2001 (the "EFFECTIVE DATE"), subject to the approval by Company
shareholders.

               1.2 PURPOSE. The purpose of the Plan is to advance the interests
of the Participating Company Group and its stockholders by providing an
incentive to attract, retain and reward Non-Employee Directors of the Company by
creating an additional incentive for such persons to contribute to the growth
and profitability of the Participating Company Group.

               1.3 TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan have lapsed.

        2. DEFINITIONS AND CONSTRUCTION.

               2.1 DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                      (a) "AFFILIATE" means (i) an entity, other than a Parent
Corporation, that directly, or indirectly through one or more intermediary
entities, controls the Company or (ii) an entity, other than a Subsidiary
Corporation, that is controlled by the Company directly, or indirectly through
one or more intermediary entities, or (iii) an entity which the Board designates
as an Affiliate. For this purpose, the term "control" (including the term
"controlled by") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the relevant
entity, whether through the ownership of voting securities, by contract or
otherwise; or shall have such other meaning assigned such term for the purposes
of registration on Form S-8 under the Securities Act.

                      (b) "BOARD" means the Board of Directors of the Company.
If one or more Committees have been appointed by the Board to administer the
Plan, "BOARD" also means such Committee(s).

                      (c) A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, a
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 2.1(u)(iii), the corporation or other business entity to
which the assets of the Company


                                       1
<PAGE>   2

were transferred (the "TRANSFEREE"), as the case may be. The Board shall
determine in its sole discretion whether multiple sales or exchanges of the
voting securities of the Company or multiple Ownership Change Events are
related. Notwithstanding the preceding sentence, a Change in Control shall not
include a Spinoff Transaction.

                      (d) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                      (e) "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                      (f) "COMPANY" means QUALCOMM Incorporated, a Delaware
corporation, or any Successor.

                      (g) "CONSULTANT" means a person engaged to provide
consulting or advisory services (other than as an Employee or a Director) to a
Participating Company.

                      (h) "DIRECTOR" means a member of the Board or of the board
of directors of any other Participating Company.

                      (i) "DIRECTOR FEES" mean a Non-Employee Director's annual
retainer fee, meeting fees and any other compensation payable with respect to
such individual's Service as a Director.

                      (j) "DISABILITY" means the Participant has been determined
eligible for supplemental Security Income benefits by the Social Security
Administration of the United States of America and also means the inability of
the Participant, in the opinion of a qualified physician acceptable to the
Company, to perform the duties of the Participant's position with the
Participating Company Group because of sickness or other physical or mental
incapacity.

                      (k) "EMPLOYEE" means any person treated as an employee
(including an Officer or a Director who is also treated as an employee) in the
records of a Participating Company; provided, however, that neither Service as a
Director nor payment of a Director Fee shall be sufficient to constitute
employment for purposes of the Plan.

                      (l) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                      (m) "FAIR MARKET VALUE" means, as of any date, the value
of the Common Stock determined as follows:

                             (i) If the Common Stock is listed on any
established stock exchange or traded on the Nasdaq National Market system or the
Nasdaq SmallCap Market system of the Nasdaq Stock Market established by the
National Association of Securities


                                       2
<PAGE>   3

Dealers, Inc., the Fair Market Value of a share of Common Stock shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or if the stock is traded on
more than one exchange or market, the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading day prior to
the day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.

                             (ii) In the absence of such markets for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board.

                      (n) "NON-CONTROL AFFILIATE" means any entity in which any
Participating Company has an ownership interest and which the Board shall
designate as a Non-Control Affiliate.

                      (o) "NON-EMPLOYEE DIRECTOR" means a member of the Board
who is not an Employee of a Participating Company Group.

                      (p) "NONSTATUTORY STOCK OPTION" means an Option not
intended to be (as set forth in the Option Agreement) or which does not qualify
as an incentive stock option within the meaning of Section 422(b) of the Code.

                      (q) "NORMAL RETIREMENT AGE" means the date on which a
Participant has attained the age of seventy (70) years and has completed nine
years of continuous Service.

                      (r) "OFFICER" means any person designated by the Board as
an officer of the Company.

                      (s) "OPTION" means a right to purchase Stock (subject to
adjustment as provided in Section 4.2) pursuant to the terms and conditions of
the Plan.

                      (t) "OPTION AGREEMENT" means an agreement, in such form as
the Board may approve, between the Company and a Participant setting forth the
terms, conditions and restrictions of an Option granted to the Participant and
any shares acquired upon the exercise thereof.

                      (u) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or
substantially all, as determined by the Board in its discretion, of the assets
of the Company; or (iv) a liquidation or dissolution of the Company.

                      (v) "PARENT CORPORATION" means any present or future
"parent corporation" of the Company, as defined in Section 424(e) of the Code.

                      (w) "PARTICIPANT" means any eligible person who has been
granted one or more Options.


                                       3
<PAGE>   4

                      (x) "PARTICIPATING COMPANY" means the Company or any
Parent Corporation or Subsidiary Corporation or Affiliate.

                      (y) "PARTICIPATING COMPANY GROUP" means, at any point in
time, all entities collectively which are then Participating Companies.

                      (z) "PRIOR PLAN OPTION" means, any option granted pursuant
to the Company's 1998 Non-Employee Directors' Stock Option Plan which is
outstanding on or after the date on which the Board adopts the Plan or which is
granted thereafter and prior to the Effective Date.

                      (aa) "RULE 16b-3" means Rule 16b-3 under the Exchange Act,
as amended from time to time, or any successor rule or regulation.

                      (bb) "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                      (cc) "SERVICE" means

                             (i) a Participant's employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director
or a Consultant. A Participant's Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Participant renders
Service to the Participating Company Group or a change in the Participating
Company for which the Participant renders such Service, provided that there is
no interruption or termination of the Participant's Service. The Participant's
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the entity for which the Participant performs Service ceasing to
be a Participating Company; except that if the entity for which the Participant
performs Service is a Subsidiary Corporation and ceases to be a Participating
Company as a result of the distribution of the voting stock of such Subsidiary
Corporation to the shareholders of the Company or a Parent Corporation, Service
shall not be deemed to have terminated as a result of such distribution. Subject
to the foregoing, the Company, in its discretion, shall determine whether the
Participant's Service has terminated and the effective date of such termination.

                             (ii) Notwithstanding any other provision of this
Section, a Participant's Service shall not be deemed to have terminated merely
because the Participating Company for which the Participant renders Service
ceases to be a member of the Participating Company Group by reason of a Spinoff
Transaction, nor shall Service be deemed to have terminated upon resumption of
Service from the Spinoff Company to a Participating Company. For all purposes
under this Plan, a Participant's Service shall include Service, whether in the
capacity of an Employee, Director or a Consultant, for the Spinoff Company
provided a Participant was employed by the Participating Company Group
immediately prior to the Spinoff Transaction. Notwithstanding the foregoing, if
the Company's auditors determine that the provisions or operation of the
preceding two sentences would cause the Company to incur a compensation expense
and provided further that in the absence of the preceding two sentences no such
compensation expense would be incurred, then the two preceding sentences shall
be without force or effect, and the vesting and exercisability of each
outstanding Option and any shares


                                       4
<PAGE>   5

acquired upon the exercise thereof shall be determined under any other
applicable provision of the Plan or the Option Agreement evidencing such Option.

                      (dd) "SPINOFF COMPANY" means a Participating Company which
ceases to be such as a result of a Spinoff Transaction.

                      (ee) "SPINOFF TRANSACTION" means a transaction in which
the voting stock of an entity in the Participating Company Group is distributed
to the shareholders of a parent corporation as defined by Section 424(e) of the
Code, of such entity.

                      (ff) "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.

                      (gg) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

                      (hh) "SUCCESSOR" means a corporation into or with which
the Company is merged or consolidated or which acquires all or substantially all
of the assets of the Company and which is designated by the Board as a Successor
for purposes of the Plan.

               2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

        3. ADMINISTRATION.

               3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered
by the Board and its designees.

               3.2 AUTHORITY OF OFFICERS. Any Officer shall have the authority
to act on behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated
to the Company herein, provided the Officer has actual authority with respect to
such matter, right, obligation, determination or election. Any decision or
determination of the Company made by an Officer having actual authority with
respect thereto, shall be final, binding and conclusive on the Participating
Company Group, any Participant, and all persons having an interest in the Plan,
or any Option granted hereunder, unless such Officer's decision or determination
is arbitrary or capricious, fraudulent, or made in bad faith.

               3.3 POWERS OF THE BOARD. In addition to any other powers set
forth in the Plan and subject to the provisions of the Plan, the Board shall
have the full and final power and authority, in its discretion:

                      (a) To construe and interpret the provisions of the Plan
and Options granted under it, in its discretion; to establish, amend and revoke
rules and regulations for its administration, and to take all such actions and
make all such decisions as may be necessary or


                                       5
<PAGE>   6

appropriate for the operation and administration of the Plan, including, without
limitation, all such decisions and determinations as may be expressly delegated
to the Board by the terms of the Plan. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem, in its discretion,
necessary, desirable, appropriate or expedient to make the Plan fully effective.

                      (b) To amend the Plan or an Option as provided in Section
11.

                      (c) Generally, to exercise such powers and to perform such
acts as the Board deems necessary, desirable, appropriate or expedient to
promote the best interests of the Company which are not in conflict with the
provisions of the Plan.

                      (d) The Board's determination of the construction and
interpretation of any provision of the Plan, and any actions taken, and any
decisions or determinations made pursuant to the terms of the Plan which are
made in good faith shall be final, binding and conclusive on the Participating
Company Group, any Participant, and any person having an interest in the Plan or
any Option granted hereunder.

               3.4 POWERS OF THE COMMITTEE. If administration is delegated to
the Committee, then the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board (and
references in this Plan to the Board shall thereafter be deemed to refer also to
such Committee), except as may be expressly limited in the delegation of power
or as provided in the next sentence. Notwithstanding the foregoing, the powers
of the Committee are limited as follows: (i) construction and interpretation of
the Plan by the Committee shall be subject to review by the Board, as determined
by the Board in its sole discretion, (ii) the requirements of the Delaware
General Corporation Law shall be complied with at all times, and (iii) the
Committee cannot make a discretionary grant under the Plan, nor amend the terms
of an automatic grant under the Plan unless such grant would still be exempt
from the application of Section 16 of the Exchange Act. The Board may abolish,
or limit the powers of, the Committee at any time and revest in the Board all or
some of the administration of the Plan.

               3.5 INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or Officers or
Employees of the Participating Company Group, members of the Board and any
Officers or Employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the


                                       6
<PAGE>   7

Company, in writing, the opportunity at its own expense to handle and defend the
same, and to retain complete control over the litigation and/or settlement of
such suit, action or proceeding.

               3.6 ARBITRATION. Any dispute or claim concerning any Options
granted (or not granted) pursuant to this Plan and any other disputes or claims
relating to or arising out of the Plan shall be fully, finally and exclusively
resolved by binding arbitration conducted pursuant to the Commercial Arbitration
Rules of the American Arbitration Association in San Diego, California. By
accepting an Option, Participants and the Company waive their respective rights
to have any such disputes or claims tried by a judge or jury.

        4. SHARES SUBJECT TO PLAN.

               4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be Six Million Three Hundred Thousand
(6,300,000). The share reserve shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof. However, the share
reserve, determined at any time, shall be reduced by the number of shares
subject to the Prior Plan Options. If an outstanding Option, including a Prior
Plan Option, for any reason expires or is terminated or canceled or if shares of
Stock are acquired upon the exercise of an Option subject to a Company
repurchase option and are repurchased by the Company at the Participant's
exercise or purchase price, the shares of Stock allocable to the unexercised
portion of such Option or Prior Plan Option or such repurchased shares of Stock
shall again be available for issuance under the Plan.

               4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of
any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number and class of shares
subject to the Plan and in the exercise price per share of any outstanding
Options. If a majority of the shares which are of the same class as the shares
that are subject to outstanding Options are exchanged for, converted into, or
otherwise become (whether or not pursuant to an Ownership Change Event, as
defined in Section 2.1(u)) shares of another corporation (the "NEW SHARES"), the
Board may unilaterally amend the outstanding Options to provide that such
Options are exercisable for New Shares. In the event of any such amendment, the
number of shares subject to, and the exercise price per share of, the
outstanding Options shall be adjusted in a fair and equitable manner as
determined by the Board, in its discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section shall be
rounded down to the nearest whole number, and in no event may the exercise price
of any Option be decreased to an amount less than the par value, if any, of the
stock subject to the Option.

        5. ELIGIBILITY FOR PARTICIPATION.

        Only those persons who, at the time of grant, are serving as
Non-Employee Directors shall be eligible to become Participants and to be
granted an Option.


                                       7
<PAGE>   8

        6. TERMS AND CONDITIONS OF OPTIONS.

        Options shall be evidenced by Option Agreements specifying, among other
things, the number of shares of Stock covered thereby, in such form as the Board
shall from time to time establish. Option Agreements may incorporate all or any
of the terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions:

               6.1 AUTOMATIC GRANT. Subject to the execution by a Non-Employee
Director of an appropriate Option Agreement, Options shall be granted
automatically and without further action of the Board, as follows:

                      (a) INITIAL OPTION. Each Non-Employee Director shall be
granted an Option to purchase twenty thousand (20,000) shares of Stock (an
"INITIAL OPTION") on the date such person first becomes a Non-Employee Director
after the Effective Date; provided, however, that an Initial Option shall not be
granted to a Director who is an Employee and who subsequently becomes a
Non-Employee Director as a result of the termination of his or her status as an
Employee.

                      (b) ANNUAL OPTION. Each Non-Employee Director (including
any Non-Employee Director who previously did not qualify as a Non-Employee
Director because of his or her status as an Employee) shall be granted on the
date of each annual meeting of the stockholders of the Company (an "ANNUAL
MEETING") immediately following which such person remains a Non-Employee
Director, an Option to purchase ten thousand (10,000) shares of Stock (an
"ANNUAL OPTION"); provided, however, that a Non-Employee Director granted an
Initial Option on, or within a period of 270 days prior to, the date of an
Annual Meeting shall not be granted an Annual Option for such Annual Meeting.

                      (c) RIGHT TO DECLINE OPTION. Notwithstanding the
foregoing, any person may elect not to receive an Option pursuant to this
Section by delivering written notice of such election to the Board no later than
the day prior to the date such Option would otherwise be granted. A person so
declining an Option shall receive no payment or other consideration in lieu of
such declined Option. A person who has declined an Option may revoke such
election by delivering written notice of such revocation to the Board no later
than the day prior to the date such Option would be granted pursuant to Section
6.1(a) or (b), as the case may be.

               6.2 EXERCISE PRICE. The exercise price per share of Stock subject
to an Option shall be the Fair Market Value of a share of Stock on the date of
grant of the Option.

               6.3 EXERCISABILITY AND TERM OF OPTIONS. Each Option shall vest
and become exercisable as set forth below and shall terminate and cease to be
exercisable on the tenth (10) anniversary date of grant of the Option, unless
earlier terminated in accordance with the terms of the Plan or the Option
Agreement evidencing such Option.

                      (a) INITIAL OPTIONS. Except as otherwise provided in the
Plan or in the Option Agreement evidencing such Option, each Initial Option
shall vest and become exercisable as follows: (i) twenty percent (20%) of the
Initial Option shall vest and become exercisable on the first anniversary of the
date of grant of the Option, and (ii) 1/60th of the Initial Option shall vest
and become exercisable each month, beginning on the date thirteen 13 months


                                       8
<PAGE>   9

after the date of grant of the Option, provided the Participant's Service has
not been terminated prior to such date.

                      (b) ANNUAL OPTIONS. Except as otherwise provided in the
Plan or in the Option Agreement evidencing such Option, each Annual Option shall
vest and become exercisable as follows: (i) ten percent (10%) of the Annual
Option shall vest and become exercisable on the date six (6) months after the
grant of the Option, and (ii) 1/60th of the Annual Option shall vest and become
exercisable each month, beginning on the date seven (7) months after the date of
grant of the Option, provided the Participant's Service has not terminated prior
to such date.

               6.4 EARLY EXERCISE. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time while an Employee,
Director or Consultant to exercise the Option as to any part or all of the
shares subject to the Option prior to the full vesting of the Option. Any
unvested shares so purchased shall be subject to a repurchase right in favor of
the Company, with the repurchase price to be equal to the original purchase
price of the Common Stock, or to any other restriction the Board determines to
be appropriate; provided, however, that (i) the right to repurchase at the
original purchase price shall lapse at the same rate as the Option vests as
described elsewhere in the Plan, and (ii) such right shall be exercisable only
within (A) the ninety (90) day period following the termination of the
Participant's Service or (B) such longer period as may be agreed to by the
Company and the Participant.

               6.5 PAYMENT OF EXERCISE PRICE.

                      (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check or
cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Participant having a Fair Market Value not less
than the exercise price, (iii) by delivery of a properly executed notice
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "CASHLESS EXERCISE"), (iv) by such other consideration as may be
approved by the Board from time to time to the extent permitted by applicable
law, or (v) by any combination thereof. The Board may at any time or from time
to time, by approval of or amendment to the standard form of Option Agreement,
grant Options which do not permit all of the foregoing forms of consideration to
be used in payment of the exercise price or which otherwise restrict one or more
forms of consideration.

                      (b) LIMITATIONS ON FORMS OF CONSIDERATION.

                             (i) TENDER OF STOCK. Notwithstanding the foregoing,
an Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would
constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company's stock. Unless otherwise provided by
the Board, an Option may not be exercised by tender to the Company, or


                                       9
<PAGE>   10

attestation to the ownership, of shares of Stock unless such shares either have
been owned by the Participant for more than six (6) months (and were not used
for another Option exercise by attestation during such period) or were not
acquired, directly or indirectly, from the Company.

                             (ii) CASHLESS EXERCISE. The Company reserves, at
any and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise.

               6.6 TRANSFERABILITY. An Option shall not be transferable in any
manner (including without limitation, sale, alienation, anticipation, pledge,
encumbrance, or assignment) other than, (i) by will or by the laws of descent
and distribution, (ii) by written designation of a beneficiary, in a form
acceptable to the Company, with such designation taking effect upon the death of
a Participant, (iii) by delivering written notice to the Company, in a form
acceptable to the Company (including such representations, warranties and
indemnifications as the Company shall require a Participant to make to protect
the Company's interests and ensure that this Option has been transferred under
the circumstances approved by the Company), by gift to a Participant's spouse,
former spouse, children, stepchildren, grandchildren, parent, stepparent,
grandparent, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, persons having one of the
foregoing types of relationship with a Participant due to adoption, any person
sharing a Participant's household (other than a tenant or employee), a
foundation in which these persons or the Participant control the management of
assets, and any other entity in which these persons (or the Participant) own
more than fifty percent of the voting interests. A transfer to an entity in
which more than fifty percent of the voting interests are owned by these persons
(or the Participant) in exchange for an interest in that entity is specifically
included as a permissible type of transfer. In addition, a transfer to a trust
created solely for the benefit (i.e., a Participant and/or any or all of the
foregoing persons hold more than 50 percent of the beneficial interest in the
trust) of a Participant and/or any or all of the foregoing persons is also a
permissible transferee, or (iv) such other transferees as may be authorized by
the Board in its sole and absolute discretion. During a Participant's life this
Option is exercisable only by the Participant or a transferee satisfying the
above conditions. Except in the event of a Participant's death, upon transfer of
a Option to any or all of the foregoing persons, the Participant, as the
Optionee, is liable for any and all taxes due upon exercise of those transferred
Options. At no time will a transferee who is considered an affiliate under Rule
144(a)(1) be able to sell any or all such Stock without complying with Rule 144.
The right of a transferee to exercise the transferred portion of this Option
shall terminate in accordance with the Participant' s right of exercise under
this Option and is further subject to such representations, warranties and
indemnifications from the transferee that the Company requires the transferee to
make to protect the Company's interests and ensure that this Option has been
transferred under the circumstances approved by the Company. Once a portion of a
Option is transferred, no further transfer may be made of that portion of the
Option.

               6.7 EFFECT OF TERMINATION OF SERVICE.

                      (a) OPTION EXERCISABILITY. Subject to earlier termination
of the Option as otherwise provided herein and unless otherwise provided by the
Board in the grant of an Option and set forth in the Option Agreement, an Option
shall be exercisable after a


                                       10
<PAGE>   11

Participant's termination of Service only during the applicable time period
determined in accordance with this Section and thereafter shall terminate.

                             (i) DISABILITY AND NORMAL RETIREMENT AGE. If a
Participant's Service terminates because of the Participant's Disability or
after the Participant reaches Normal Retirement Age, then except as otherwise
provided in Section 6.7(a)(ii), (A) the Participant's Service shall be deemed to
continue and the exercisability and vesting of the Option and, in the case of an
immediately exercisable option, the shares acquired upon exercise thereof shall
continue under the terms and conditions of the Option Agreement, and (B) the
Option to the extent unexercised and exercisable may be exercised by the
Participant (or, the Participant's guardian or legal representative) at any time
prior to the expiration of the Option's term as set forth in the Option
Agreement evidencing such Option (the "Option Expiration Date").

                             (ii) DEATH. If the Participant's Service terminates
because of the death of the Participant, or if the Participant dies after
attaining Normal Retirement Age, or after the Disability of the Participant
then, (A) the exercisability and vesting of the Option and any shares acquired
on the exercise thereof shall be accelerated effective as of the date of the
Participant's death, and (B) the Option, to the extent unexercised and
exercisable on the date of the Participant's death, may be exercised by the
Participant's legal representative or other person who acquired the right to
exercise the Option by reason of the Participant's death at any time prior to
the expiration of twelve (12) months after the date of the Participant's death,
but in any event no later than the Option Expiration Date.

                             (iii) OTHER TERMINATION OF SERVICE. If the
Participant's Service with the Participating Company Group terminates prior to
Normal Retirement Age for any reason except Disability, or death, the Option, to
the extent unexercised and exercisable by the Participant on the date on which
the Participant's Service terminates, may be exercised by the Participant at any
time prior to the expiration of twelve (12) months after the date on which the
Participant's Service terminates, but in any event no later than the Option
Expiration Date.

                      (b) EXTENSION IF EXERCISE PREVENTED BY LAW.
Notwithstanding the foregoing, if the exercise of an Option within the
applicable time periods set forth in Section 6.7(a) is prevented by the
provisions of Section 10 below, the Option shall remain exercisable until three
(3) months after the date the Participant is notified by the Company that the
Option is exercisable, but in any event no later than the Option Expiration
Date.

                      (c) EXTENSION IF PARTICIPANT SUBJECT TO SECTION 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 6.7(a) of shares acquired upon the exercise of the Option would
subject the Participant to suit under Section 16(b) of the Exchange Act, the
Option shall remain exercisable until the earliest to occur of (i) the tenth
(10th) day following the date on which a sale of such shares by the Participant
would no longer be subject to such suit, (ii) the one hundred and ninetieth
(190th) day after the Participant's termination of Service, or (iii) the Option
Expiration Date.


                                       11
<PAGE>   12

        7. STANDARD FORMS OF AGREEMENTS.

               7.1 OPTION AGREEMENT. Unless otherwise provided by the Board at
the time the Option is granted, an Option shall comply with and be subject to
the terms and conditions set forth in the form of Option Agreement approved by
the Board concurrently with its adoption of the Plan and as amended from time to
time.

               7.2 AUTHORITY TO VARY TERMS. The Board shall have the authority
from time to time to vary the terms of any standard form of agreement described
in this Section 7 either in connection with the grant or amendment of an
individual Option or in connection with the authorization of a new standard form
or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of agreement are not inconsistent with
the terms of the Plan.

        8. CHANGE IN CONTROL. In the event of a Change in Control, any
unexercisable or unvested portions of outstanding Options and any shares
acquired upon the exercise thereof held by Participants whose Service has not
terminated prior to such date shall be immediately exercisable and vested in
full as of the date ten (10) days prior to the date of the Change in Control.
The exercise or vesting of any Option and any shares acquired upon the exercise
thereof that was permissible solely by reason of this Section shall be
conditioned upon the consummation of the Change in Control. In addition, the
surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the "ACQUIRING CORPORATION"), may
either assume the Company's rights and obligations under outstanding Options or
substitute for outstanding Options substantially equivalent options for the
Acquiring Corporation's stock. Any Options which are neither assumed or
substituted for by the Acquiring Corporation in connection with the Change in
Control nor exercised as of the date of the Change in Control shall terminate
and cease to be outstanding effective as of the date of the Change in Control.
Notwithstanding the foregoing, if the corporation the stock of which is subject
to the outstanding Options immediately prior to an Ownership Change Event
described in Section 2.1(u)(i) constituting a Change in Control is the surviving
or continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the outstanding Options
shall not terminate unless the Board otherwise provides in its discretion.

        9. TAX WITHHOLDING.

               9.1 TAX WITHHOLDING IN GENERAL. The Company shall have the right
to deduct from any and all payments made under the Plan, or to require the
Participant, through cash payment or otherwise, including by means of a Cashless
Exercise of an Option, to make adequate provision for, the federal, state, local
and foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to an Option or the shares acquired pursuant thereto.
The Company shall have no obligation to deliver shares of Stock or to release
shares of Stock from an escrow established pursuant to an Option Agreement until
the Participating Company Group's tax withholding obligations have been
satisfied by the Participant.


                                       12
<PAGE>   13

               9.2 WITHHOLDING IN SHARES. The Company shall have the right, but
not the obligation, to deduct from the shares of Stock issuable to a Participant
upon the exercise of an Option, or to accept from the Participant the tender of,
a number of whole shares of Stock having a Fair Market Value, as determined by
the Company, equal to all or any part of the tax withholding obligations of the
Participating Company Group. The Fair Market Value of any shares of Stock
withheld or tendered to satisfy any such tax withholding obligations shall not
exceed the amount determined by the applicable minimum statutory withholding
rates.

        10. COMPLIANCE WITH SECURITIES LAW.

               The grant of Options and the issuance of shares of Stock upon
exercise of Options shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities.
Options may not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
no Option may be exercised unless (a) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (b) in the opinion
of legal counsel to the Company, the shares issuable upon exercise of the Option
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of any
Option, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.

        11. TERMINATION OR AMENDMENT OF PLAN.

               The Board may terminate or amend the Plan at any time. However,
subject to changes in applicable law, regulations or rules that would permit
otherwise, without the approval of the Company's stockholders, there shall be
(a) no increase in the maximum aggregate number of shares of Stock that may be
issued under the Plan (except by operation of the provisions of Section 4.2),
and (b) no other amendment of the Plan that would require approval of the
Company's stockholders under any applicable law, regulation or rule. No
termination or amendment of the Plan shall affect any then outstanding Option
unless expressly provided by the Board. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding Option without
the consent of the Participant, unless such termination or amendment is
necessary to comply with any applicable law, regulation or rule.

        12. MISCELLANEOUS PROVISIONS.

               12.1 REPURCHASE RIGHTS. Shares issued under the Plan may be
subject to a right of first refusal, one or more repurchase options, or other
conditions and restrictions as determined by the Board in its sole and absolute
discretion at the time the Option is granted. The


                                       13
<PAGE>   14

Company shall have the right to assign at any time any repurchase right it may
have, whether or not such right is then exercisable, to one or more persons as
may be selected by the Company. Upon request by the Company, each Participant
shall execute any agreement evidencing such transfer restrictions prior to the
receipt of shares of Stock hereunder and shall promptly present to the Company
any and all certificates representing shares of Stock acquired hereunder for the
placement on such certificates of appropriate legends evidencing any such
transfer restrictions.

               12.2 PROVISION OF INFORMATION. Each Participant shall be given
access to information concerning the Company equivalent to that information
generally made available to the Company's common stockholders.




                                       14
<PAGE>   15

                                  PLAN HISTORY


____________, 2000      Board adopts Plan, with an initial reserve of 6,300,000
                        shares.

____________, 2001      Stockholders approve Plan.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.43
<SEQUENCE>6
<FILENAME>a71824ex10-43.txt
<DESCRIPTION>EXHIBIT 10.43
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.43

                             QUALCOMM INCORPORATED
                 2001 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
                            STOCK OPTION GRANT NOTICE

QUALCOMM INCORPORATED (the "Company"), pursuant to its 2001 Non-Employee
Directors' Stock Option Plan (the "Plan") hereby grants to the Optionee named
below a non-qualified stock option to purchase the number of shares of the
Company's common stock set forth below. This non-qualified stock option is not
intended to qualify for the federal income tax benefits available to an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended. This option is subject to all of the terms and
conditions as set forth herein and the Stock Option Agreement (attached hereto)
and the Plan which are incorporated herein in their entirety.

<TABLE>
<S>                                                             <C>
Optionee/ID #:  [[ First_Name ]] [[ Last_Name ]] #[[ ID ]]      Grant No.:  [[ Number ]]
Date of Grant:  [[ Option_Date ]]                               Shares Subject to Option: [[ Shares_Granted ]]
Exercise Price Per Share:  [[ Option_Price ]]                   Expiration Date: [[ Expiration_Date_Period_1 ]]
</TABLE>

        VESTING SCHEDULE

<TABLE>
<CAPTION>
         Exercisable Shares            Full Vesting Date             Expiration Date
         ------------------            -----------------             ---------------
<S>                                  <C>                          <C>
     [[ Shares_Period_1 ]]           [[ Vest_Date_Period_1 ]]     [[ Expiration_Date_Period_1 ]]
    *[[ Shares_Period_2 ]]           [[ Vest_Date_Period_2 ]]     [[ Expiration_Date_Period_1 ]]
</TABLE>

  *These option shares vest on each monthly anniversary date after
  [[ Vest_Date_Period_1 ]] as to 1/60th of the total shares granted.

ADDITIONAL TERMS/ACKNOWLEDGMENTS: The undersigned Optionee acknowledges receipt
of, and represents that the Optionee has read, understands, accepts and agrees
to the terms of the following: this Grant Notice, the Stock Option Agreement and
the Plan (including, but not limited to, the binding arbitration provision in
Section 3.6 of the Plan). Optionee hereby accepts the Option subject to all of
its terms and conditions and further acknowledges that as of the Date of Grant,
this Grant Notice, the Stock Option Agreement and the Plan set forth the entire
understanding between Optionee and the Company regarding the acquisition of
stock in the Company and supersedes all prior oral and written agreements
pertaining to this particular option.

NOTE: THE OPTIONEE IS SOLELY RESPONSIBLE FOR NOTIFYING THE COMPANY, IN A TIMELY
MANNER, OF ANY ELECTION TO EXERCISE THE OPTION, AND THE COMPANY SHALL HAVE NO
OBLIGATION WHATSOEVER TO PROVIDE NOTICE TO THE OPTIONEE OF ANY MATTER,
INCLUDING, BUT NOT LIMITED TO, THE DATE THE OPTION TERMINATES.

QUALCOMM INCORPORATED:                     OPTIONEE:

By:_______________________________         ____________________________________
Richard Sulpizio                           Signature
President
Dated:  [[ Option_Date ]]                  Date:_______________________________

Attachment:       Stock Option Agreement (A10-DIR)


                                       1
<PAGE>   2

                              QUALCOMM INCORPORATED
                 2001 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
                             STOCK OPTION AGREEMENT


        Pursuant to the Grant Notice and this Stock Option Agreement, QUALCOMM
Incorporated (the "Company") has granted you an Option to purchase the number of
shares of the Company's common stock ("Stock") indicated in the Grant Notice at
the exercise price indicated in the Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the QUALCOMM Incorporated
2001 Non-Employee Directors' Stock Option Plan (the "Plan") shall have the same
definitions as in the Plan.

        The details of this Option are as follows:

        1. VESTING. Subject to the limitations contained herein, this Option
will vest as provided in the Grant Notice, provided that vesting will cease upon
the termination of your Service, unless such termination is due to Disability or
death. If termination of Service is due to Disability or death, then the
exercisability and vesting of the Option shall continue or accelerate to the
extent provided for in the Plan and this Agreement.

        2. EXERCISE OF THE OPTION.

               2.1 METHOD OF EXERCISE. You may exercise the vested portion of
this Option at any time prior to the expiration of the Option by delivering a
notice of exercise in such form as may be designated by the Company from time to
time together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours
and prior to the expiration of the Option, together with such additional
documents as the Company may then require pursuant to the terms of the Plan.

               2.2 METHOD OF PAYMENT. Payment of the exercise price may be by
cash (or check), or pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which, prior to the issuance of Stock,
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to a broker which provides for the payment of the
aggregate exercise price to the Company, or a combination of the above methods,
as the Company may designate from time to time.

               2.3 TAX WITHHOLDING. By exercising this Option you agree that as
a condition to any exercise of this Option, the Company may withhold from your
pay and any other amounts payable to you, or require you to enter an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of this Option;
(2) the lapse of any substantial risk of forfeiture to which the Stock is
subject at the time of exercise; or (3) the disposition of Stock acquired upon
such exercise.

               2.4 RESPONSIBILITY FOR EXERCISE. You are responsible for taking
any and all actions as may be required to exercise this Option in a timely
manner and for properly executing any such documents as may be required for
exercise in accordance with such rules and


                                       2
<PAGE>   3

procedures as may be established from time to time. By signing this Agreement
you acknowledge that information regarding the procedures and requirements for
this exercise of the Option is available to you on request. The Company shall
have no duty or obligation to notify you of the expiration date of this Option.

        3. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this Option may not be exercised unless the Stock issuable
upon exercise of this Option is then registered under the Securities Act or, if
such Stock is not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.

        4. TERMINATION OF THE OPTION. The term of this Option commences on the
Date of Grant (as specified in the Grant Notice) and expires and shall no longer
be exercisable upon the earliest of:

                      (a) the Expiration Date indicated in the Grant Notice;

                      (b) the tenth (10th) anniversary of the Date of Grant;

                      (c) the last day for exercising the Option following
termination of your Service as described in the Plan; or

                      (d) a Change of Control, to the extent provided in the
Plan.

        5. OPTION NOT A SERVICE CONTRACT. This Option is not an employment or
service contract and nothing in this Stock Option Agreement , the Grant Notice
or the Plan shall be deemed to create in any way whatsoever any obligation on
your part to continue in the service of the Company, or of the Company to
continue your service with the Company. In addition, nothing in your Option
shall obligate the Company, its stockholders, Board, Officers or Employees to
continue any relationship which you might have as a Director or Consultant for
the Company.

        6. NOTICES. Any notices provided for in this Stock Option Agreement, the
Grant Notice or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by the
Company to you, five (5) days after deposit in the United States mail, postage
prepaid, addressed to you at the last address you provided to the Company.

        7. ARBITRATION. Any dispute or claim concerning any Options granted (or
not granted) pursuant to the Plan and any other disputes or claims relating to
or arising out of the Plan shall be fully, finally and exclusively resolved by
binding arbitration conducted by the American Arbitration Association pursuant
to the commercial arbitration rules in San Diego, California. By accepting an
Option, Participants and the Company waive their respective rights to have any
such disputes or claims tried by a judge or jury.

        8. AMENDMENT. The Board may amend your Option at any time, provided no
such amendment may adversely affect the Option or any unexercised portion of
your Option, without your consent unless such amendment is necessary to comply
with any applicable law or


                                       3
<PAGE>   4

government regulation. No amendment or addition to this Stock Option Agreement
shall be effective unless in writing or, in such electronic form as may be
designated by the Company.

        9. GOVERNING PLAN DOCUMENT. Your Option is subject to this Stock Option
Agreement, the Grant Notice and all the provisions of the Plan, the provisions
of which are hereby made a part of this Stock Option Agreement, and is further
subject to all interpretations, amendments, rules and regulations which may from
time to time be promulgated and adopted pursuant to the Plan. In the event of
any conflict between the provisions of this Stock Option Agreement, the Grant
Notice and those of the Plan, the provisions of the Plan shall control.





                                       4

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