OK, Maurice, let's see whether I'll do better than Frezza. I can't do much worse. I'll be back, as my fellow European put it... in November to gloat/admit defeat. Possibly both.
* Qualcomm will issue a profit warning before November or report disappointing second and/or third quarter results.
* TDMA & GSM will do better than expected in the US market this year due to flagship models by Ericsson and Nokia currently pushed in the States combined with the aggressive new ATT pricing policy. That won't prevent CDMA from dominating the US market, but it will mean a substantial market share for TDMA/GSM.
* Qualcomm's new phone due to be delivered in summer will either be delayed, have too slow production ramp-up, experience quality problems or face so stiff price competition from Asian companies it won't make profit. Q-phone never made a cent, did it? After the quality problems and sales set-backs it never made back the investment in it. More of the same with the new model.
* Both Ericsson and Nokia will get the Bluetooth technology implemented considerably sooner than Qualcomm.
* Asian problems continue; implementation of CDMA in China is slow, GSM adds millions of subscribers each month; CDMA launch in Japan bogs down with Motorola's problematic network equipment/lack of competitive handsets/recession slowing sales, pick any two of those; Korean depression (let's face it, gang) *will* be reflected on the subscriber growth before year's end... 10% unemployment will be an unprecedentent mood damper & militant labour unions get scary.
* Qualcomm has underplayed the importance of Korea for its bottom line in hopes of a quick recovery, it has to face the facts this year.
* Qualcomm has overplayed its hand in the W-CDMA debate. It will have to accept fees considerably lower than 5%, it won't be able to make W-CDMA compatible with IS-95, it will get involved in horrible litigation with Ericsson (whose suit against Qualcomm will go to court next fall) which unnerves investors, it possibly gets finessed completely out of W-CDMA; pick any two of the above.
* Irwin Jacobs does a nimble little tap dance and once again charismatically explains that the troubles are almost over and the check is in the mail.
I guarantee not all of the eight points will be realized. But if four of them will materialize, it will keep this stock flirting with forties until December -97. Do not try to wiggle out of this next winter by pointing out one of two instances where I was wrong... I'm saying it's just mostly right. Which will be enough.
Show me some antipodean guts, Maurice, and go out on a limb... what's your alternative? What's it gonna be? Huh? Would you say Qualcomm will outperform Nokia in the next six months? Will we see a slow-down in GSM sales growth? I dare you...
Sincerely yours,
Tero
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