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

QCOM 161.39

-1.9%

3:59 PM EST

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To: David E. Taylor who wrote (21960)	4/29/2002 5:07:42 PM
From: carranza2	Read Replies (1) of 197226

Could it be that the Chinese are buying IS 95 A/B chips in substantial quantity and getting discounts? I can't imagine that the 1X chips are getting discounted at the beginning of the product cycle. The DO chips are probably going to command a premium over $35, and lots of them are going to be sold this quarter, so I wouldn't be too concerned. Your conclusion seems reasonable: Easy to figure (1) - if this was the cause of the lower revenues, 95A/B chips are now being sold for $10.93, while the mean ASP for the 1x's is still $34.78. Call it $11 and $35 respectively. That's around a 50% discount on 95A/B chips over the last two Q?s. Is this it? QCOM is stuck with some inventory of the MSM 3xxx's that they are dumping off so as to switch over to the 1x and 1xEV-DO MSM 5xxx's as quickly as possible? If so, even tougher on Nokia! I also wonder which customers are still buying IS 95A/B MSM-3xxx's? I don't believe they support the R-UIM's that are needed in China, so they must be going into other end markets that don't need 1x, or which need a "cheap" basic CDMA chip. I do recall reading some comments somewhere recently that QCOM expected to be shipping 100% 1x by the end of 2002. Like you, I would not be happy if Q was discounting the high end chips as well as the CDMAOne chips, but I can't imagine any circumstances under which that would be the case. Can you? The only reason for doing so would be to impose market discipline (punish competitors) but it doesn't have anyone to worry about in the 1x or DO markets. It's strictly a "charge what the market will bear" situation. Did Nokia all of a sudden start developing competitive 1X or DO chips? I don't think so.... Great analysis and great post, by the way. Thanks for taking the time and effort to produce it.

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