Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 147.19

-3.6%

3:59 PM EST

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To: David E. Taylor who wrote (110501)	1/8/2002 6:18:33 PM
From: Stock Farmer	Read Replies (1) of 152472

Ah ha. So we can quantify a few things. By 2005 "Optimistic": Let's use 5% of handset price = QCOM profit Let's use top end handset ASP = $300 Let's use 80 M handsets per year in China (ref. previous post, and then boosted 'cause I'm being optimistic) Let's use 50% penetration of CDMA, 50% GSM (I told you I was being optimistic) Let's use 750 M shares (<0% dilution) "Pessimistic" Let's use 2% of handset price = QCOM retained profit after any boondoggles Let's use bottom end handset ASP eroded by 10% p/a for 3 years = $120 Let's use 40 M handsets per year in China Let's use 30% penetration of CDMA, 70% GSM Let's use 5% share dilution = 870 M shares Optimistic:-- 5% * $300 * 60 M * 0.5 / 750 M = $0.60 EPS contribution Pessimistic:- 2% * $120 * 40 M * 0.3 / 870 M = $0.03 EPS contribution Or maybe folks want to plug in their own numbers. Sure, China's a large market. But even hundreds of millions multiplied by a few percent of a few hundred and then divided by hundreds of millions lies somewhere in the range of unity. John

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