Gorilla and King Portfolio candidates - Moderated Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Uncle Frank who wrote (2531)	2/17/2009 9:13:21 PM
From: ggamer	1 Recommendation Read Replies (1) of 2955

I really miss those good old days when people were talking about 800 pound gorillas . . . I wonder what you and Mike think about the prospect of QCOM becoming the gorilla of All Gs JP Morgan report. Breaking into Nokia is one of the few ways Qualcomm can gain increased 3G chip share, since Qualcomm has approx. 35-40% 3G chip share and Nokia has 40% market share in phones. • JPM expects very limited impact to QCOM in FY’10 but could benefit FY'11 by $0.05 if Nokia can get 35% share of the US 3G smartphone market in FY’2011 assuming approx. 25-30M of the 90M handsets JPM estimates could ship into AT&T and TMO in 2011 are smartphones and that Nokia ships roughly 10M of those. • This agreement could be tip of the iceberg; Qcom could capture Nokia’s business in other regions, especially in the low end where BRCM could have a difficulty delivering on its new 3G supply agreement to Nokia. • QCOM could possibly obtain $800M in additional revenue and up to $0.20 of EPS if Qcom captures just 25% share of Nokia's total 3G volume by 2011/12 – which could double to 160M by then from ~80M today – equating to roughly 40M chips, assuming a $20 ASP and an incremental GM of 40%. • JPM does not believe this agreement includes Snapdragon wireless data chipset, based on conversations in Barcelona. • JPM believes "this is a strategic error by Nokia despite helping it break into the US as we believe it 'starves' other erstwhile chip providers of business, and thereby R&D dollars, helping QCOM, the 800-pound GORILLA in the market, to further distance its products from the competition leading Nokia eventually back to a single-source situation similar to what Nokia was in with supplier TI for GSM." (JPM doesn't explain why this is bad for Nokia; it just assumes that principal reliance on one company is not good. It could obviously be good for Qcom so long as Nokia doesn't demand too low prices.)

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next