OT: Re: QCOM
cdma has 20% of market which's predicted to grow to 25% of market, while gsm predicted to fall to 70%.
all over next 2-3 years. growth from 20 to 25% is growth of 25% (5/20) over say 3 years or 8.3% a year for cdma/qcom.
You are confused: You are equating market share and growth, and you are assuming a static market. By this same logic, if (say) JDSU has a 40% share of the optical-components market (I am just throwing a number out--I don't know what the accurate figure is), and if (say) that share is projected to rise to 50% in 3 years, then by your logic, JDSU will only grow 25%, or 8.3% a year (actually less, due to compounding). Why does this not make sense? Because the pie is growing in FO. Likewise for wireless.
I am sure you don't believe the above logic w/r/t JDSU, so why should you believe it about QCOM? Pro-forma rev growth is likely closer to 50% than the single digits.
Also, I don't know where you get the idea that QCOM's patents "run out" in 2003. Please don't tell me you got that info off an IDC thread.
Having said that, your point about QCOM having a lot of baggage has the ring of truth. There will be a lot of shareholder-sweat (uncertainty) over the coming years, I think. Which is why the stock trades at a valuation discount to the likes of JDSU, despite QCOM's higher earnings and margins. That discount is likely to persist IMO. |
