Tim, I don't know what sources you are using for your analysis of QCOM, but it clearly isn't the 1996 QualComm annual report, which can be had for the asking, or reviewed at their web site.
QCOM is a business in the development stage, which in 1996 spent 20% of the total revenues on R&D. Your concern for margins would be appropriate for an established enterprise but not for this transition phase.
Insider selling of 250,000 shares, out of more than 9 million owned by 23 officers and directors, is not surprising nor disturbing. QCOM share price has run up about 20 points in the past few weeks, so it is a reasonable time to take some profits. Even insiders need money, from time to time, and sale of a small portion of holdings does not necessarily indicate a lack of faith in the company's future.
Growth rate in the U.S. is slow compared to Asia, because the installed wireless base in the U.S. is enormously greater than that in Asia.
QualComm has many ways to benefit from CDMA technology: sale of chips, sale of receivers, sale of infrastructure equipment, licensing of the technology for all of the above to other manufacturers, OmniTracs equipment and systems, and, of course, GlobalStar, which will dominate the satellite wireless market in a few years. Iridium will not be the low cost provider in that market, and Iridium does not have nearly the number and quality of strategic partners that GlobalStar has lined up.
If you want to appreciate the investment opportunity offered by QCOM, you are going to have to do a bit more homework. You might start by reviewing archives of Bill Frezza's CDMA FORUM (http://www.cmp.com/cgi-bin/techtalk/cdma). Frezza is not a friend of QCOM/CDMA; he is more in the Ericsson/TDMA/GSM camp. However, other participants on the FORUM adequately present the case for QCOM/CDMA.
Reagan
(no connection with QualComm, other than ownership of some shares) |
