<The company’s
single mode WCDMA
chipset is likely to be available this quarter. QUALCOMM is meeting regularly with
Vodafone to
confirm WCDMA
timelines.>
Upbeat Meetings with Management
Yesterday, we hosted a series of investor meetings with QCOM's CDMA chipset
division president Don Schrock
and treasurer Dick Grannis. Following meetings, we believe that QCOM's
competitive and strategic positioning continues to
improve, as the company is poised to benefit from several key growth drivers in
2002. We are reiterating our 1 Strong Buy
rating on this core wireless holding.
The near-term outlook on 15 to 16 million chips in fiscal 1Q01 continues to
strengthen. QUALCOMM is over 90% booked
for the quarter. While March visibility is more limited, an uptick QoQ appears
increasingly likely on the strength of an uplift
from the Chinese market. The rollout of CDMA2000 1x is gaining momentum in
Korea, Japan, and the U.S.
QUALCOMM’s new generation of ZIF (zero intermediate frequency) chips remains
on track to launch in 1Q02. In
addition, the outlook for the
Indian market appears increasingly positive.
We consider QUALCOMM’s positioning for the emerging W-CDMA chipset market
to be impressive.
QUALCOMM’s dual-mode W-CDMA/GSM chipsets remain on target for 3Q02.
The company’s single mode WCDMA
chipset is likely to be available this quarter. QUALCOMM is meeting regularly with
Vodafone to confirm WCDMA
timelines.
Potential to Dramatically Expand Addressable Market with W-CDMA. Developing
Early Leadership in WCDMA Chipset
Rollout. Meetings with Vodafone
QUALCOMM management has also been able to outline its early leadership in the
development of W-CDMA
chipsets for the European Market and other W-CDMA arenas. Mr. Schrock
underlined the challenges that remain in
W-CDMA development with the formal standards remaining far from complete.
Nonetheless, QCOM has already made
available a single mode W-CDMA chipset platform with the 5200. Looking forward,
with the launch of the 6000 series,
QCOM is on track to rollout a new multi-mode W-CDMA/GSM/GPRS chipset in
3Q02
considerably in advance of its peers. QUALCOMM management also confirmed
that the chip unit is holding regular
discussions with several European carriers including a monthly update with
European giant Vodafone. We believe the
Vodafone has been impressed by the rapid development timelines being outlined
by QUALCOMM and by the opportunity
QUALCOMM's chipsets may bring to broaden its handset supplier base. QCOM is
already
working on W-CDMA interoperability with vendors such as Ericsson and Nortel.
Fine-Tuning the W-CDMA Standard? A Move to A Synchronous Architecture
Interestingly, QUALCOMM management also hinted that the continued delays in
the development of W-CDMA systems
has prompted some industry discussion of revising the standards to make
W-CDMA more like existing CDMA standards.
For example, it appears that some engineers from Ericsson, Nokia and other large
vendors are
questioning whether W-CDMA would benefit from being Synchronous as opposed
to its current Asynchronous architecture.
We consider that any change in the direction of the W-CDMA standard to make it
more like the existing CDMA family of
standards could be positive for QUALCOMM. |
