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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (95)	7/23/1999 6:12:00 PM
From: gdichaz	Read Replies (3) \| Respond to of 13582

What is puzzling about the Ericsson announcement is that it seems that the company is unable (or unwilling) to put out a CDMA phone until the Mar-June quarter of calendar 2000. Is Ericsson really that poor at ramping up when the innards of the phone can be purchased and the phone itself could be modified from one in current production? Or is this a software problem? Is the missing link the Q's software knowhow which Ericsson may not wish to license or the Q does not wish Ericsson to have? Any ideas on this? Curious. Chaz

To: Wyätt Gwyön who wrote (95)	7/23/1999 6:40:00 PM
From: JGoren	Read Replies (1) \| Respond to of 13582

It's positive. The company's model is to sell chips even to its handset competitors. The chipset is the most profitable component in a handset. Remember that little company Intel; it doesn't make boxes, it doesn't fabricate computers; it just sells "Intel Inside." It is also generally regarded that making handsets helps the company make better chipsets even though some of its competitors may not particularly like buying chips from a competitor. One of the reasons that some people have thought the company would eventually sell the handset division is that it would enable it to maintain dominance in the chipsets by selling to Nokia and Ericy. Every handset maker which has tried to design or manufacture its own cdma chips has encountered problems. Mot came to the market late because it arrogantly refused to buy Qualcomm chips. From what we hear, MOT still doesn't get the performance from its handsets that it should. To: gdichaz--According to posts on the other thread, Qualcomm has assisted Nokia with a software problem Nokia had, so it is not unwilling to help a competitor.

To: Wyätt Gwyön who wrote (95)	7/23/1999 10:25:00 PM
From: SKIP PAUL	Read Replies (1) \| Respond to of 13582

Handsets get to market three ways: 1. Third party asics and third party handset. In this case both the Asic manufacturer and Handset manu. pay royalties to QCOM. My guess is QCOM makes about $14 to $20 per handset depending on the transfer price of the product. 2. Qcom asic and third party handset. In this case QCOM makes aprofit on the ASIC and gets royalties from the handset manu. My guess is that QCOM makes $ 12 to $24 in royalties and $12 gross margin on the asics. 3. QCOM asic and QCOM handset. In this case QCOM keeps it all but spends a lot of money and effort in manufacturing and marketing the products. My guess is QCOM makes about 35% gross margins on the handsets which would be approx $70 per handset average. Comments!!

To: Wyätt Gwyön who wrote (95)	7/24/1999 1:45:00 AM
From: engineer	Read Replies (1) \| Respond to of 13582

Take the market share that Ericy has in the world and assume that they now have the means to push IS-95 and CDMA2000. Is it a good thing that they start selling the market share in Qualcomm related things? Yes. does it mean some redistribution of revenues? Yes. Will it hurt them? Probably not, as I once learned....grow the pie and try to keep as much of the portion that you have and your portion of the pie will be larger than before. Or said otherwise, if you have a 10% market share and the size of the market gets bigger, then if you can keep the 10%, you win. If you try to get 50% of the market, but the market gets alot smaller, then you probably have lost. It may mean that they give and take revenue between differnt business portions. ERICY may enter the US CDMA handset market, but they will then have ASIC income, which most likely is at a much higher margin than the handset business. But if it means the ERICY will start building out China or Europe with their newly acquired basestation division and then use the handsets, then the market will have grown alot larger. In the end, this is a good thing.