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To: DWB who wrote (19414)	7/21/1999 2:49:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

Yup! I did not know the quarterly shipments for STBs and Digital Cameras. <scrapped rest - acronym confusion!> of interest re: QCOM's MSM chip: qualcomm.com

To: DWB who wrote (19414)	7/21/1999 3:45:00 AM
From: shane forbes	Respond to of 25814

"Also, and I'm not sure if this is a valid calculation... using their 1.2 BTB ratio they quoted, wouldn't that say they've got another 13+ million going out the door in the next quarter?" Dan, revenues come out of backlog and turns orders. Bookings add to backlog. So the picture would be: Revenues <--- Backlog contribution + Turns contribution ^ \| \| Net Bookings (not shipped out during Q - that is the non turns contribution) add cumulatively to total backlog Therefore if a company has a 1.2 BTB all it means is that bookings were 20% more than revenues. As to when those bookings become revenues that depends entirely on how long it takes for the company to ship an order. [With LSI this is 6-12 weeks (WAG?)] If QCOM has a shipment time under 3 months then sure all the bookings during the quarter would have shipped during the next quarter. More likely than not this is not true. So to really know how many they will ship you need to know: - current backlog chart - meaning a distribution of orders vs. time - the average time it takes to ship those orders. For instance, if you have backlog at the end of December of 1,000 distributed as follows: July orders: 300 Augu orders: 100 Sept orders: 200 Octo orders: 100 Nove orders: 150 Dece orders: 150 Let's say you take exactly 6 months to ship an order out. Then in the next quarter you get revenues as follows: Janu revenues: 300 (all of July orders shipped) Febr revenues: 100 (all of Augu orders shipped) Marc revenues: 200 (all of Sept orders shipped) Total revenues: 600 To complicate life let's say they get 100 in orders in January that they ship during the quarter (a turns order). Then total revenues now become: 700. Now it gets a bit murky. Would the company use the 100 in extra turns orders during the quarter to add to their bookings number? I think they should since they are very real bookings! But note these have already shipped and are out of backlog now! So QCOM's 1.2 could have included bookings that shipped during the quarter. This seems unusual but is likely true nevertheless. Murkiness 202. Not sure. Notes: (1) Note that none of the billings in the last 3 months of the year even shipped during Q1. So we can't always predict revenues for a Quarter based on last Quarter's bookings. Let's say instead of the above we had a 3 month ship time. Then (July - Sept) backlog contributions would vanish (they would have shipped in Q4 of last year) and the entire bookings of Q4 of last year becomes revenues for Q1 of this year. This would be the analogy of the 13 mil for QCOM. (2) Shipment time is not uniform so there is no earthly reason to assume that a sequence like the above takes place - but averages nevertheless help. (3) As indicated by the extra 100 revenue is also generated via turns orders during the quarter. These can be huge and with the current low inventory model (temporary!) - the Dell model - this is a big time 'happening thing' in chip land. (4) The bookings during a current quarter convert to revenues later on. So in QCOM's case we don't see a 20% increase over this Q's revenue next quarter instead we might see a XX% increase spread over several quarters depending entirely on how the orders progress through backlog, turns, and cancellations. (5) Finally backlog can also be cancelled and so can bookings - not a good thing as your plans go into toilet land.