J-- I've been looking at Qcom for some time. Got in and out of it
once for small profit. Hadn't intended to get out of it, but the
layoffs of workers, albeit temps, at phone factory worried me,
together with some less tangible issues.
Maybe you can help me. I think I understand the fundamentals
fairly well. I tend to believe that CDMA will have a big market
share.
But, although clearly if that is so, qcom will be making royalty
revenues, that does not appear to be nearly enough to sustain the
estimates that Value Line or S&P have for 98 and forward revenue and
bottom line growth. There is the estimate there of qcom getting
strong percentage of both infrastructure and handset sales, and of
making nice margins on that work...
So, how do we know co. can execute? Because my sense is if its mostly
royalties that add to the bottom line going forward, qcom is pretty
richly valued right now.
Now I've put things way too starkly to clarify my concern....I'm sure
Qcom will get some part of phone sales, and will sell at least some
of those profitably, and will continue to get at least some part of
the infrastructure build out. Etc. But will it be as strong as
the bullish analystis believe? Others have downgraded.
Unfortunately, the main focus of the thead seems to usually be CDMA
holly wars; or if not that, technical discussions of battery
standby time per ounce of headset weight, etc....
And clearly Jacobs is a technologist first. Founder type. Is he
a good executive? Clearly he is not terrible -- Omnitracs as a cash
cow, etc. But can he run a lean machine? In competing against MO,
ERICY, NT, etc.
Can you enlighten me??
Regards |
