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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 165.13

+1.1%

Nov 26 3:59 PM EST

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To: slacker711 who wrote (41367)	6/30/2004 12:15:21 PM
From: Jim Mullens	Read Replies (2) of 196771

Slacker, Re: Unicom/ MSM6300 pricing, and “ 2) You cant just lower the price on the MSM6300 and keep the rest of the chipset pricing the same. If the MSM6300 was a sub $20 chip, orders for the MSM6100 and the MSM6050 would dry up entirely. ASP's and margins would tumble immediately. “<<< Again, we’re talking about a “attacking” a potentially huge market of 78 million subs and still growing (just for Unicom). The handset replacement market for Unicom alone should be in the neighborhood of 25 Million handsets annually, a huge market. Initially I would imagine dual mode handset would sell in the range of the higher tier GSM units because of the pricing power of the ‘new ness” and the handset mfg’s desire to recapture R&D costs. However, Q has stated their desire to segment this market to the mid and eventually the lower tiers as well. Unicom has stated on many occasions the benefits of the “world phone”, differentiating their services- - allowing their GSM users to access the higher data rates CDMA affords - relieving capacity from the GSM networks - lower cost of supplying data services Re : TXN and “1) TI has a lower cost structure for GSM chipsets than Qualcomm. Their chips wouldnt include a CDMA component so it would require lower processing power. They also have a substantially higher volumes and they have their own fabs (no 10% margin for TSMC).” <<<< 1. Have you compared TXN’s Operating margin to the Q’s- TXN.........12.05% QCT.........36.3% QCL.........92.7% Tot Q........50.2% GAAP 2. The Q’s production costs are dropping significantly with- .... ZIF technology, .....the advances in silicon production methods, and .....increasing volumes. Question- Who’s volumes are significantly increasing- the Q’s or TXN’s Answer- Which market does TXN predominately support (GSM), and which are the growth markets where the “old ball game” drastically changes (3G CDMA/ WCDMA). 3. The Q by integrating more components on their mid and higher tier MSM’s will be able to raise those prices significantly, yet significantly lower the overall BOM/ assemble/ test/ procurement cost to the handset mfg (LG Securities report) 4. The Q has stated they will vigorously defend / attack all market segments. To that end they offer chipsets in the “Value Platform” which are intended to support handset pricing in the $60 to $75 range. IMO only, I have no inside info- (gg)

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