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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 178.29-1.6%Dec 12 9:30 AM EST
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To: Dan Ross who wrote (3392)8/11/1997 4:33:00 PM
From: IKM   of 152472
 
Drowning in posts since I'm back from the lake. Royalties and license fees *are* a big deal for QCOM - stating the obvious. What is probably disturbing for those who do a more methodical analysis of companies than we on this thread is the fact that QCOM would still be a loss-making company if not for those royalties. That is, expenses and amortizations still exceed the revenue from handsets, infrastructure, equity investments, etc. Unless handset sales explode, they have to have a heavier hand on expenses to be a viable manufacturing company. BTW, as roaming agreements are consumated and dual-mode phones become available, handset sales *should* explode. That opens up the business user and large business contracts as a segment that Sprint and PrimeCo can sell to. I suspect they are only getting consumers, small local businesses, realtors, and the like just now. Heavy users and premium prices as well as commitments are coming attractions. The incumbent analog providers will see their churn accelerate as contracts expire. Infrastructure sales will increase as the CDMA operators race to keep capacity up with demand. Share of infrastructure sales will move in lockstep with what has already been sold, with the exception of some few C and D block players actually getting funding. That is what 1998 holds in store.
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