Four or five comments to recent posts of note:
1st- I'm surprised no one reacted to the following (from the Goldman Sachs comment put out on Q's earnings by Ruff):
We
are maintaining our current rounded fiscal (Sept) estimates for
Qualcomm, although our $1.10 estimate for this year has been fine-tuned
to a single-point $1.08 to reflect some of the pro forma guidance of the
company.) Our June quarter is now $0.27 (versus $0.28 before) and our
September quarter estimate is now $0.28 (versus $0.31). We are still
about a nickel above guidance.
With the news re. 1x chips shipping, front-end loading in Korea due to the subsidy ban and the estimates for 15 million or so chips for the quarter, what pro forma guidance is GS referring to and WHEN was this guidance given? I would have thought that recent guidance would be pushing EPS somewhat higher.
Granted, GS has never been a great fan of the Q!, as during all of 1999 GS never had better than a trading buy on the stock (it is now MO--that's outperformance, not tobacco). GS's wireless universe waxes ecstatic on NXTL (they love the Nextwave fiasco), VSTR, NOK, ERICY, all the usual suspects. Q rarely gets a mention of any kind. And when it does, it's pushing guidance lower.
2nd- re. the inevitability of NOK signing a deal with Q because otherwise it will be frozen out of the 1x chip market--would it were so! However, given the concerted FUD effort by NOK in respect of DS, the alliances with DoCoMo, IDC, MOT and just about every possible anti-Q party out there, I don't know. It's not as if the wireless universe generally (i.e., GSM) is not growing rapidly and other "opportunities" don't loom (Japan, Korea, AWE): it might be a mistake to believe that NOK is crying in its beer at the thought of being frozen out of the 1x/CDMA2000 market. Doubtless it would be more lucrative for Q and NOK to put aside their differences, but NOK is involved in a high stakes game here, and they ain't exactly going broke for the moment. Seems to me they're going for broke, with their partners in crime IDC, for example.
3rd- re. the royalty pie and the Q's net take on DS: at the moment, as far as we know, Q does not yet have a license for the GSM network protocol and other network elements on which DS is based (i.e., other than the air interface and related IPR). As far as we can tell, the net take on a Q DS chip will be less, even though the royalty rate on the Q IPR is the same for DS as for MC. Refusing to license Q's IPR for DS as a means of holding them hostage to Q's interpretation of what the offsetting IPR might be worth to DS operators and equipment makers might run afoul of "fair and non-discriminatory" basis for licensure under ITU principles. Eric L. might want to address this point.
4th- true as someone pointed out: MOT's settlement with Q differentiated between pre-July 1995 (lower royalty rate) and post-July 1995 (prevailing rate) IPR for which MOT has to pay the Q! But 3G was not part of that deal. MOT and NOK remain outside the fold in that regard.
5th- pheilman, good catch on Ruff. But note that OnStar has been used by GM Cadillac for years as a GPS system, without using CDMA. The press release refers to the forthcoming plan to incorporate internet access as part of the OnStar package, which presumably includes Verizon's (ne BAM) CDMA modems. So the 300,000/1,000,000 OnStar sub numbers might be referring to pure OnStar, without Q's chip. Good news nonetheless on the marketing success Verizon is having with GM.
6th- the amoung of FUD spun around the China Unicom saga is astounding. (The latest WSJ story now touts that Q's framework agreement has fallen asunder because it insufficiently armed the local Chinese constabulary with homegrown power to make equipment. My recollection is that the framework agreement was built on exactly that notion. Yet NOK and ERICY continue to sell the heck out of their oferings in China. I shake my head at this turn of the worm. Wonder what the EU/China deal on WTO would have triggered in terms of the FCPA were it subject to same.) It is as if every investor, every finance writer, every news service that was left at the station as the Q train left early last Spring (seems like a lifetime ago), needs to spew its pound of s--t as the newly shrunken David. As Dr. J is want to say, "it's a land grab out there." Let's hope the Q long ago staked the best claims. It does afford us a bit of comfort to realize that Q's management foresaw some of this opera: in its investment in the Korean carrier and the sale of the handset division to KYO, Q was arming its quiver in the struggle for the heart of Asia.
Steve |
