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

QCOM 151.59

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Jan 30 9:30 AM EST

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To: slacker711 who wrote (68081)	8/21/2007 8:23:41 PM
From: Eric L	Read Replies (2) of 197451

"Very Minor," Minor, or Significant? Slacker (Slaker), Art wrote ... And of course, we all know that WCDMA handsets have until now been a very minor part of the total revenues for Nokia. You wrote ... Before I go digging through some numbers, would you mind telling me what your definition of "very minor" is? You backed into this number and commented... At that rate, Nokia's WCDMA revenues would be $3.745 billion. Nokia's total handset revenue in the 2nd quarter $11.538 billion (using 1.34 Euros to the dollar). ... That means that WCDMA handset revenues were 32.5% of total handset revenues. I would also add that Nokia has stated that WCDMA handsets are more profitable than GSM....so an even higher portion of their total profits are coming from WCDMA units. Nokia's total Q2 handset revenue with currency converted at 6/20/07 Interbank rates was actually $12.315 Billion USD (€9.149 Bil). My quick back of napkin using a different approach than yours puts their WCDMA handset revenue at ~$3.981 Billion or 33% of their total handset revenue sales. Their overall pre-tax operating margin for all handsets was 20.9% or $2.574 Billion USD, and of course was slightly higher for WCDMA units than GSM or CDMA units. You asked, Art ... Can I safely say that none of these numbers fall into the "very minor" category? They don't for me. Nokia's ~$3.981 Billion of WCDMA handset sales revenue is 70% greater than QUALCOMM's FQ3/CQ2 total revenue sales of $2.33 Billion from all sources. LG and Samsung are QUALCOMM's two largest customers and Samsung is the 2nd largest handset manufacturer globally. Their total handset revenue sales (all technologies) were $4.273 Billion (Samsung) and $2.926 Billion (LG). Samsung's operating margins were 8.0%, and LG's were 11.6%, unusually high for them but their WCDMA and GSM sales were big drivers of that. Art stated to you ... Slacker, if your assumptions on royalty rate of about 3.5% are correct, then I agree that Nokia WCDMA revenues are significant. Factoring what Nokia says on the subject, and what QUALCOMM says, I think your 3.5% might be a tad high. I now use 3.25% but who really knows If Nokia and QUALCOMM can't figure it out? Best, - Eric -

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