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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 169.27-4.8%Jan 12 3:59 PM EST
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To: Art Bechhoefer who wrote (38826)1/15/2004 6:41:51 PM
From: pyslent  Read Replies (2) of 197177
 
the effect of 700,000 fewer handsets sold (i.e., assuming a new phone for each new subscriber) means about $1 million less earnings

Do you mind providing your calculations? Here's my best guess: 2% of $180 ASP = $3.6 per handset in royalties (= $2.5 million less revenue @ ~ 90% margins). On the chipsets, they sell for $20 each, say, with 25% margins or so, so another $5 earnings hit per handset. By these estimates, a shortfall in china of 700,000 handset sales means around $5.6 million less in earnings, although I think QCOM has always been skeptical of CHU's target. Still, it's not a major hit on the fundamentals (less than 1 cent in eps).
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