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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 137.04

+0.5%

10:26 AM EST

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To: nbfm who wrote (447)	7/9/2000 11:53:01 PM
From: cfoe	Read Replies (1) of 197618

Qualcomm could manufacture chips for both standards, though Jacobs said Qualcomm's chipset market share could be eroded as competitors enter the business. Message 14010240 Please indulge me in a little arithmetic exercise to expand on what Dr. J did not say and what various financial analysts and reporters appear to miss. First the chart, then a brief explanation: Tech Mkt Wgt Q Mkt% Q Mkt % Q $ % Q $ % Now Future Now Future CDMA 100 85 50 85 50 GSM 300 0 0 0 0 (3 x CDMA) W-CDMA 300 N/A 50 0 150 (= GSM) Totals 85 200 Let’s assume for the sake of this exercise that: 1) the GSM/W-CDMA market is three times as large as CDMA now and in the future (both grow, but the relative size remains the same) and 2) QCOM’s CDMA expertise garners them a 50% market share in W-CDMA chipsets. Then it seems to me that with respect to ASIC revenues QCOM will be better off with W-CDMA out there. In fact based on the above numbers they would be almost 2.5 times better off than they are now. And this does not include the fact that QCOM will be getting royalties on 400 (100 CDMA + 300 W-CDMA) Mkt Wgt versus the 100 it now gets. Even if some of Q’s W-CDMA royalties are somewhat offset by royalties paid to others and even if ASIC prices slide, QCOM wins big from an expanding market. And the CDMA market should be growing as well. Why? Because if Q is selling W-CDMA chipsets, I assume that they will be compatible with existing and future versions of CDMA. In fact, I cannot imagine that QCOM has any intention of licensing its essential IPR to anyone who would build a W- CDMA chip that is not backward- and forward- compatible to CDMA.

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