Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 170.58

-0.2%

12:01 PM EST

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To: David E. Taylor who wrote (118728)	5/13/2002 11:36:34 AM
From: slacker711	Read Replies (2) of 152472

I think the 15-16 million chipsets (with 10 million 1x) shipment number is already built into QCOM's guidance EPS of $0.21 to $0.23 I've been burned by being optimistic before....but here is my thinking. During the February CC, Qualcomm stated that ASP's on a region by region basis were flat but increased shipments into NA and SA was causing the weighted average of the ASP's to drop. The weighted average for the December royalty reports were going to be used to calculate the March royalty estimates. This is what led to the guidance for 5-10% YoY ASP drops. They reiterated this guidance during the April CC and stated that the drop during the first two quarters was towards the low end of the 5-10% range. It is my opinion that we are going to see this trend reversed. Now....my thinking is based on the fact that the actual March quarter shipments were weighted dramatically higher towards Korea and Japan (and a little bit for China) than for the US. Total handset sales were down 2-3 million during the quarter from the 4th quarter....but the Asian region probably saw a sequential increase of 1.5 to 2 million units. This should lead to a sequential increase in ASP's (not sure about YoY). I think total units could be flat. A decrease by 1 million in Korea should be made up by better sales from China, Japan and possibly Verizon. The other half of the equation is chipset sales. During the April call, a couple of comments were made about increasing profit margins with increased volume. If Qualcomm can keep ASP's on chipsets flat (definitely possible with the shift to the MSM5100), and get a couple of extra points in margin, we could see 3 extra cents in earnings from this division alone. It seems to me that Qualcomm has included the ASIC volume/margin story in the guidance....but not any possible increase in ASP's. Slacker

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