Forget about yesterday's news announcments and remember why you bought this stock. Most of the new revenue opportunities for QCOM have yet to surface - UMTS, WCDMA, CDMA2000, HDR modem cards, MP3, MPEG4. We are living off a handful of service providers in Korea, Japan, and the US.
QCOM now has the opportunity to become a real momentum stock as the visibility for revenue growth and EPS growth are crystallizing. New products and new markets are presenting themselves very fast. GSM & TDMA companies are beginning to walk down the 3G aisle for UMTS services. ATT's defection to WCDMA is a huge positive for QCOM. China, North Korea, Vietnam, India, and Russia are beginning to deploy CDMA & CDMA WLL networks. South America is beginning to show real growth. BLS's plans to upgrade their TDMA networks to CDMA would be a huge boost in near term visibility. DoCoMo's vision of a global WCDMA empire is destined to create an abundance of UMTS customers that will be paying QCOM royalties. Look at the list of 20 companies that have already agreed to pay QCOM royalties for WCDMA equipment ranging from handsets to base stations including ERICY, Philips, Lucent, Nortel, Motorola, Samsung, etc... There is only 1 notable exception, and I believe that the deal with TI paves the way for final resolution with the Nokians.
The problem with QCOM is that the conversion of TDMA and GSM networks to WCDMA has been stalled due to a lack of technology standards, not to mention the lack of WCDMA ASICS. Now that the GSM community is deploying new UMTS services, the rush to upgrade existing networks to WCDMA is becoming more of a priority. The big picture for CDMA was the commonality of all wireless standards under the CDMA umbrella. I think we have crossed the threshhold from 2G to 3G regardless of intermediate digressions the GSM carriers may make. |
