Does anyone believe Q's claim that its eps growth is hampered by handset price erosion and parts shortage? I don't. I think that's bullshit. These factors did not hamper Q's performance of past quarters. Neither did it to MOT and NOKA's performance. No logic here.
Perhaps your shallow understanding of the dynamics at work in the CDMA handset market clouds your judgment. Previous quarters did not see any competition for the Q from Nokia or MOT. Nokia's offering was a joke. Although the same might be said for the 6185, the familiar shape is attracting consumers that are comfortable with the form. Software issues and recalls notwithstanding, the Nokia 6185 is now competition. MOT just now was able to get the CDMA ASIC to a point they could roll out a CDMA StarTac. Thus, for the first time, there is competition for shelf space in the US. That drives down ASPs. Worldwide, the demand for handsets continues to skyrocket, with demand for components high. That keeps those costs up. At this time, competition for shelf space is winning over component costs. Q is willing to give up margin to keep share. Is this such a difficult concept to grasp? Component shortages were flagged in the last CC as the limiting factor for growth. Q could increase production, but shortages of parts keeps a cap on that capacity expansion. Once again, no conspiracy there. No conspiracy with the secondary offering. No destruction of the growth rate.
. I am just wondering whether secondary offering has anything to do with it. The chart looks very ugly. We are in for another round of free fall. Next stop could be 140.
140? You mean the same price it was at the beginning of August? You mean only 7X our money instead of 9X? Meaningless gyrations.
Do you really think that CDMA growth has ceased? Will the new systems firing up worldwide halt the growth of QCOM? Will the rollout of data and the myriad of higher priced gadgets lower the royalties received? Will the inclusion of ASICs in laptops as a standard piece of equipment put an end to QCOM's rise? Will the buildout of a nationwide Sprint data-centric network, coupled with the joining of BAM and Airtouch into a second nationwide CDMA network, complete with data, make QCOM's growth rate slow? Will the addition of ERICY as a CDMA infrastructure supplier and marketer wound the QCOM CDMA franchise? Will deployment of both mobile AND WLL CDMA systems in such places as Brazil cap our earnings abilities? Only the informed can answer these questions. Or, alternatively, one can make investment decisions based on the chart looks ugly." |
