Notes from CC; hope not too many mistakes:
dr j says because of the negative reports it has called CC; quarter impressive
1x chip shipments to be 8 mill; 1 mill higher than originally anticpated
currently online to ship 14 mill chips
brew launch by VZ spring
10,000 downloads of BREW app developers software so lots of new additional software should be available
GSM1x; overlay with cdma2000 radio; peak data 134 kbps 1.25 mghz band; 2.4 megs in 5 mghz band
believes colour screens and new apps will cause lots of handset upgrades
China Unicom, phase 2 deployment by end of year
India's Reliance rollout will be rapid because now focusing on the infra
KDDI April 1x launch but have been expanding services pre-launch; GPS location services very popular
steady progress 3Gcdma; mentioned Brazil
new CFO from Tokyo: excitement positioning in Japan; reaffirm earnings guidance; proforma est 20 cents, 19-21; expected 14 mill chips, of which 8 mill 1x chips--exceeding prior guidance; double sept 1x shipments; expect 21 mill new cdma phones in Dec. quarter, up 7%; carriers, sellers avoiding too much inventory; avg selling price for phones has nOT declined; wtd avg selling price for dec. quarter will decline; not updating full year forecast for earnings at this time; March quarter performing in accord with year plan
QUESTIONS:
June Q shipments to increase; seeing positive trends; q 100% booked for the quarter??; with Sprint and VZ launches North Am will be very strong; Korean demand very good; plus Japan with KDDI. China we expenct to build; India will be more significant in Sept quarter; ASP's 1x demand helping avg selling price; on royalty side region by region, ASP has held up pretty well but NA market lower
Ques re margins and how much does China figure in re MSM: margins will be similar to last Q if not improving; this q China relatively low numbers but expecting Unicom sub base to be about 1 mill by end of March q.
royalty reports, one or two licensees have not yet reported; for 21 mil handsets for dec. q, expect seasonal decline for march q; est. slight decline in net royalties for march Q; QTL revs to be slightly below last Q, about 7-8% below; are not seeing excess inventories of either phones or chips
5100 vs. 5105 split--5100 increasing as proportion of total but 5105 will remain largest seller this march q
NOK had good cdma dec. q aiming at lower end of market; MOT had reasonable q (largely selling 95A phones which don't have Qcom chip); MOT will be using Qcom for its 1x; no idea how well NOK will do without Qcom chips; MOT working with OEM Korean vendor re chips; Qcom expects near term royalty remain same but longer term increase; China bill second half of year will be significant; NOrtel focusing NA rollouts Sprint and VZ
carriers will accept 95A chips for some period of time, next few quarters, low end phones
nothing new Pegaso; "we're making good progress."
will bigger share of phones be in NA because of 1x? Latin Am co. conservative near future shipment of devices relatively flat;
Dr J. 1xEVDO 5500 chip; just before World Cup this spring some uptake, watch after than
Korea under 1 dollar per megabyte; should be example to NA; thinks carriers will be aggressive
China phase 2 timing: building still going on phase 1.5; phase 2 includes 1x; hoping to see orders placed by mid-year; in India not see substan. growth until Sept quarter; not expecting REliance to launch until Sept Q
a lot of networks getting up with 1x, will cause significant change in overall characteristics of the market
Tracs: good shift in Euro market; just allowed to compete there; profitablity good because of messaging; new markets opening up besides long haul trucking
WCDMA rollout timing: Qcom has test phone avail (demonstrated by three mfrs plus Qcom); softare and operability are the holdup that take time; signif numbers 2004-05 (10 bill units) but co working hard to move up the time frame
VZ feedback re 1x: working with VZ to optimize network overall VZ happy with launch
QSI expecting loss due to consolidating Vesper (40-50 loss contribution)
1xGSM lower risk and available sooner
BREW network apps highest used; BREW doesnt add cost to phone; it's the color screen driving the difference, higher ASP; color vs. noncolor about $40 or more
users with BREW result in 4x usage of data vs. those without BREW; increased revenue from 700,000 brew users drove entire ARPU up 9% across entire sub base
Revenue guidance, haven't commented, we're seeing little change from what prev. expected but somewhat down from dec. Q; fact device mfrs getting higher prices on their units so there hasn't been particularly strong pressure for Qcom to drop chip prices--consumers like the phones and pay the price; on low end, there is always pressure
replacement market is more important; pcs took sub growth to 3 mill so pcs decrease is marginal impact to Qcom
Paul: carriers in learing mode and concern about overloading their network; as they gain more comfort they will be more aggressive pricing; they're were afraid of what happened to AOL when it went unlimited pricing
how much help is color screens: smaller nos beginning; diffuse its way down; color makes big diff in games; 15-19 age group game demand in US is lower than other places in the world is one thing they know; gonna be a supply issue more than demand issue
MSDW question: financing issues carriers, how change their strategy; Tony--perceived financing issue--not affect them; while P&L hit sub acquisition, sub increases more impt for long term survivability to increase market share
Brew structured rev share model so carriers have little upfront cost to get started
Dr J closing remarks: he was in Bucharest, Hungary--1st 1x network at 450mghz--consistent above 150kbps faster than can get online; at Cannes we had Brew operating over numerous interface platforms; looking forward to KDDI and US launches and World Cup |
