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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 155.82-1.3%Jan 23 3:59 PM EST
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To: gc who wrote (39755)9/5/1999 10:06:00 AM
From: Harvey Rosenkrantz  Read Replies (2) of 152472
 
The problem with that argument is that if the Q is under margin pressure from competitors wanting to take handset market share by lowering ASP (average selling price), who do you think is the most likely to be supplying ASICs to that competitor. Since the Q currently holds about 90% of the merchant chip market in ASICs, they will make the profit in that division instead. If they do not supply the asic, they still make a royalty on the sale of the competitor's phone.

So far, the Q has continually been capacity constrained on handset production due to their internal ability to assemble those little beauties. Perhaps now their constraint is that they can't get enough parts to keep the lines going full blast. I would assume that the parts shortage is not unique to the Q, thus limiting production worldwide thereby mitigating price erosion.
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