Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 170.90

-1.3%

Nov 7 9:30 AM EST

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To: Mike Torrence who wrote (129315)	5/27/2003 10:35:49 AM
From: Jim Mullens	Read Replies (2) of 152472

Email to Mr Moritz. Some comments regarding your article- “The Dark Side speaks on Nokia vs. QCOM. “ 1. “, but observers agree that the company can't expect to maintain its stranglehold -- Qualcomm sells close to 90% of all the world's CDMA chips -- forever.” For the past two quarters Qualcomm’s CDMA chipset market share has been over 90% as most chips sold have been for 3G CDMA2000. Qualcomm has traditionally had a mid 70% market share in CDMA chipset sales. 2. “Focusing the spotlight on a sweating Qualcomm…” And, “"It's not exactly devastating to their business model," says one New York money manager who has no Qualcomm position. "Sure, they are losing market share, but it's possible that the entire world will be using CDMA phones some day." << With the possibility that the entire world will be using CDMA phones someday and that Qualcomm’s addressable market will then expand from 100 million handsets per year to 600 million or more, do you really believe that it is Qualcomm doing the “sweating”? Perhaps Nokia and TXN are doing the “sweating” as they currently have less than 8% market share of as you say “the world's fastest-growing wireless technology. 3. “What Keitel is less eager to point out is that while Qualcomm pockets an estimated $6 to $9 of every CDMA phone purchase, it is entitled to almost none of the revenue from the chips used in Nokia phones. Keitel declined to comment on the terms of Nokia's licensing agreement, but experts expect Qualcomm to receive few if any royalty payments from Nokia.” Qualcomm’s royalty revenue on each and every CDMA phone sold averages about 5% or about $9/ phone. The Nokia phones sold without a Qualcomm chip still provide a healthy royalty of about 5% of the wholesale phones price to Qualcomm. Thus, Nokia will be paying considerable royalties to Qualcomm. Thanks for your time.

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