attended analyst conference, a few notes>
-- all slides presented at show should be on Q's website
-- Dr. Jacobs: we "probably will be out of subscriber handset biz"
-- "other technologies can't compete with" Q's HDR technology
-- Q is "equally happy with any of the 3 [CDMA 3G] modes"
-- EDGE is not and cannot be an evolution to CDMA
-- Sulpizio: MSM 3100 will definitely ship in September; expect sequentially greater MSM shipments 4th quarter
-- Japan CDMA market doubled in last 3 months
-- to analysts: "you will be pleased with numbers we will show" on royalty revenues in 4th quarter
-- handset biz: "prices (ASP) dropped a little faster than we thought"
-- royalties are paid as a % of ASP on handsets; drop in ASP will have negative effect, but "hoping volume" will make up for
-- Thornley: "expect gross profit increase to strongly continue"
-- operating expenses will come down
-- operating profit of over 20% "very sustainable" and going forward Q "looks to improve on this rate of profitability"
-- Paul Jacobs (consumer products): CDMA suports but does not require WAP
-- CDMA is only wireless technology that is internet capable
-- future handsets will integrate speech codec into interface and you will be able to respond to e-mail by speaking into phone, which will be heard by person at other end
-- wireless knowledge doesn't compete with Symbian
-- consolidation on the side of carriers will result in consolidation of handset manufacturers to boost volumes and that is why Q has to get out (or change)
-- ASPs on handsets "took precipitous drop" last quarter and Q had to reevaluate viability of business model
-- overseas marketers (Nokia Ericy?) are cutting prices to gain market share and Q couldn't compete
-- Q needed to be large enough to gain "respect" from component suppliers
-- Q looking for "partner"
Schrock (ASICs, etc) -- very impressive presentation, my impression was tremendous possibilities -- massive possibilities -- on chip side
-- MSM 3100 will integrate voice codec
-- future chips will have multiple CPUs will be able to run Windows CE, Symbian, Palm operating systems at same time
-- Jeff Jacobs: LG and Sony shut down chip production and went completely to Q for chips
-- Q is the only source for 64K data rate chipset at this time
-- MSM 3100 will be speaker independent voice recognition
-- Ericy is using Q ASICs in their phones
-- others: Q looks for HDR to be very big over time
-- Q will be able to get HDR up and running 2 years ahead of any competitor
-- Q is working with Cisco and MSFT re HDR
-- Dr. Jacobs talked about China -- continuing negotiation; China trying to negotiate best possible royalty rates, not yet acceptable to Q; Q won't go after China unless good royalty rates for Q
-- in response to question, Q already has 20 patents issued on HDR; CDMA patents also cover HDR
-- Dr. J said Q is not looking to spinoff Omnitracs at this time
-- Thornley, in response to question: divestiture of handset division will be accretive to earnings; ASICs will ultimately make up for loss of handset revenue
-- he doesn't expect to see degradation in margins this quarter, but could happen next quarter
-- Sulpizio said book-to-bill ratio on ASIC orders wouldn't be as strong this quarter as past 2 quarters, which were "phenomenal"
-- Dr J. hopes to settle MOT suit, but can't be sure
-- Dr. J. is "very very pleased with all aspects of the relationship" with Ericy
-- I got the sense that Ericy is now a big Q ally
-- Dr. J said Q may expand the relationship with Ericy
-- the change in Ericy leadership has no effect on settlement
-- Dr. J: the data biz will rapidly accelerate
-- Dr J: the cell phone will become the next computer; HDR will make the cell phone a network appliance; HDR financial impact is probably about 1 year away, depending on carrier deployment; HDR provides same capabilities as 3G.
Hope I got this right, but there was much, much more. Overall, I thought it was a great conference. My impression is that Q is a massive, massive company with massive, massive business prospects. The presentation was far-reaching and helped to broaden the focus away from quarter to quarter variations, as Gregg Powers has told us to do.
I was pleasantly surprised that I got in.
Hope this helps, a little. -- idler. |
