Wireless Apples and Oranges (The SoCal PR HYPE factor)
Jim,
<< I believe CDMA handset sales were 87M (22%) out of 400 million in 2002. >>
I do not.
I have noticed that you tend to "believe" whatever best supports your exaggerated hyperbolic tendencies to promote the company whose stock constitutes >85% of the equities in your portfolio.
If you think I have a problem with that, even though I am invested in that company, you are absolutely nuts on (or "nutballs" on, as AO in SF or L appropriately would say).
My highest level investing filters are applied to self-indulgent message board cheerleaders that exhibit your tendencies.
I personally believe that CDMA handset sales (sell-in) were 87M (~20.5%) out of (at least) 424 million:
Message 18707371
Gartner's numbers presented at the link above are sell-through.
In a perfect world sell-thru equals sell-in, but this is not a perfect world and we know that sell-in last year exceeded sell-thru.
Even though there was excess CDMA in warehouses or channels at the beginning of 2002, it was far greater at 2002 end consequently for the 4th consecutive year CDMA sell-thru was exceeded by sell in. Much greater than GSM at either beginning or end of 2002, and eventually that catches up.
If you happen to accept Per Lindberg of Dresdner Kleinwort Wasserstein's (DWK) numbers for 2002 sell-in, then Qualcomm's reported CDMA handset sell-in was 87M (18.1%) out of 480 million.
I happen to take Gartner Dataquest's numbers, and the research methodology that backs it up, as the most credible in the industry. Perhaps you favor someone else, but apples are never oranges, so you need to apply one set of numbers against a corresponding set of numbers, or you have SoCal fruit juice as an end result.
This is the first year that Qualcomm has ever come back and positively adjusted handset numbers after their usual attempt to skate by it in their first CQ1 CC.
This year they finally used their own numbers from reported licensee revenues, simply because this is the first year in 5 that the numbers ever worked to their advantage and allowed a positive revenue adjustment.
In the prior year they used Strategy Analytics numbers (the highest reported by anyone for CDMA). The year before that they used MicroLogics (the highest reported by anyone for CDMA). Do you see a pattern? The reasons are obvious. This is the first year since 1998 that they have ever come close to meeting even the low end of their CDMA industry forecast.
As for your other questions /statements:
<< Do they [LB] break out their yearly adds and replacement numbers by technology- GSM/GPRS, WCDMA, CDMA2000, etc? >>
No.
<< They show a replacement rate of less than 30% of the prior year subs. That equates to holding a handset for over 36 months. PCS has stated handsets are replaced on average every 18 months and I read elsewhere the average is two- two ½ years. Your thoughts? >>
In 2001, replacement sales moved in Europe from 24 months to 30. In US it moved from 20 to 24 or 26 months. Korea has moved out to over 22 months as a result of close subsidy supervision, and Japan is moving out as well. In emerging less affluent countries obviously its less. 30 to 36 months is probably about right. New features, new services, new plans, (are intended to) offset that. Europe right now is in a replacement cycle. Hopefully US will be. Meantime subs are expanding in less affluent countries where replacement rates will run 40 to 60 months on average.
<< Additionally, the new super 3g phones should create a surge in replacement rates, right? >>
Not in the near future.
As you know I do NOT consider 1xRTT release ZERO or GSM EDGE to be 3G, by any stretch of Perry's or Irwin's or Chris's West Coast hyperbolic US PR oriented imaginations.
As a consequence "super 3g phones" connotes to me 1xEV-DO phones (backward compatible to IS-95/A/B/C) or single or dual-mode 3GSM WCDMA phones.
<<Qualcomm’s London day presentation last year included a chart showing 2005 forecasted handset sales at 533M, with 329 being CDMA based (avg of Shosteck, Gartner, Strategy Analytics, and EMC forecasts). These same firms forecast 2001 CDMA handset sales at 81M vs the actual of 87M. Going from 87M CDMA handsets in 2002 to 329M in three years represents a 278% gain, a rather gorillaish feat. >>
Actually it is more typical of the exceptionally creative Qualcomm slidesmanship for which they have become infamous, rather than any gorillaish feat.
They used the EXACT same set of slides (with same sources) at the preceding May analysts day when IMJ pronounced without a blink (not even saying "the consensus of research agencies is" ...) that CDMA subs would reach 170 million in C03. This is, of course perfectly consistent with he has done to set expectations each and every year.
In August 2000, with more than adequate visibility IMJ projected 100 million CDMA subs at year end (50 million net adds or 100% YOY) to analysts who knew better. Year ending was 80 million (30 million net adds or 60% YOY).
At the end of 2001 Perry LaForge overstated 2001 sub numbers by over 10 million at an important CDG conference in Latin America 2 weeks before CDG published official numbers.
Last May with reasonably adequate visibility IMJ projected 170 million CDMA subs at year end (59 million net adds or 53% YOY) to analysts and investors who knew better. Year ending was 147 million (36 million net adds or 32% YOY).
The handset numbers you present follow from there, and are just as credible, incredible, or uncredible.
Imagine how this translates to Qualcomm slides on spectral efficiency, comparative technology costs, and link-rate budgets which in turn translate into a fundamental cost of building out a network.
It simply doesn't hang together Jim. That's why as investors we do ongoing DD.
Best,
- Eric - |
