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

To: Gregg Powers who wrote (331)	7/28/1999 6:55:00 PM
From: marginmike	Respond to of 13582

Gregg do you have any idea where Q will spend their new found Billion? I would also be curious about your opinion on the H&Q report that came out recently?

To: Gregg Powers who wrote (331)	7/28/1999 7:10:00 PM
From: puzzlecraft	Respond to of 13582

Gregg, Excellent analysis. One thing you didn't do was compare the cost of GSM migrating to GPRS and/or EDGE to the cost of doing an overlay with CDMA. Nokia and others seem pretty intent on going the GPRS/EDGE route within GSM rather than overlaying with CDMA. How do the economics compare? Regards, John

To: Gregg Powers who wrote (331)	7/28/1999 7:56:00 PM
From: moat	Read Replies (1) \| Respond to of 13582

The difference between intrinsic value and today's quoted stock price is what we are most interested in. Gregg, I am new here (others are too due to the recent runup). So that all of us are in sync, please take a moment and help us with the big picture (before I get lost in the details). Framing the big picture in our mind ... This is a very interesting business due to its three streams of revenues: handsets, ASICs, and royalties. Its technology (CDMA) and history (Holy War) is also very interesting. The size of the market. At the end of 1998 there were approx 25 million CDMA users and 162 million GSM users (6x as many!), over time (3G, 4G, whatever) all wireless handsets will contain CDMA in it; over time, 5-15 years out, we could have 1-2 billion users. Add this picture to the yet unknown Internet (data) applications .... we have a sense of size. First, the IPR (CDMA patents and know-how) of the company is most important. How solid is this position? Pretty solid we think (hope). Forgetting about the complex business model for a moment, at the end of the day QCOM could realize an after tax profit of a few dollars ($10?) for every handset sold eventually. A toll booth somewhat like MS's Windows (we hope). About ASICs. Couple weeks ago Dr. Jacobs (CEO) said "Yes, CDMA is complicated". That is good right? That means CDMA ASICs are hard to design and manufacture. Since QCOM has the know-how, they should continue to enjoy a lead here (the technology has a ways to go in advancement). So, the ASIC business has been, and should continue to be, a very good business. Perhaps somewhat Intel-like (we hope). About handsets (currently 50% of revenues). QCOM doesn't have the scale of a Nokia or a Motorola, but it's no longer small either, and will be getting bigger in scale in time. Wireless devices will undergo a lot of advancements in the next few years. QCOM have decided to stay in this business and will be addressing the high-end of this space (e.g. pdQ and JV w/ MSFT, etc) There is some risk here because over time this space will experience supply & demand issues (especially at the low-end) and profits (losses) will be choppy. This is the tail (handset) that will wag the dog (ASIC, royalty, hence stock) from time to time. For investors, it will be lots of gut checking, homework, and opportunity. As long-term investors of a good business, volatility is our friend. Back to IPR, royalties, and the whole business. How do we get our hands around this thing assuming QCOM's IPR & CDMA-know-how can hold forever? A model of perhaps US$10 (or 3-5% of each device) of profit from every wireless phone sold (via handset or ASIC or royalty) in the long-run? (Maurice suggested $20 per year) This leads us to an estimate for intrinsic value. Finally, and a very important point, management is good. How does your big-picture view of this investment differ? Please critique.

To: Gregg Powers who wrote (331)	7/28/1999 8:21:00 PM
From: Ramsey Su	Read Replies (2) \| Respond to of 13582

Now that Gregg is here, we can finally call this an official QC thread. I presume your comment regarding Qualcomm's 'full valuation' is an attempt to provoke debate rather than a carefully researched conclusion?! Me, provoke debate? You obviously have not been reading this thread. Many think I PROVOKE, period. <ggg> The following is what I said, I opine that without some quantum leap, QC is fully valued as a handset, ASICs and royalty company. Not that it will not continue to reward investors, just that it will not be in the same magnitude as it did so far this year. I don't think you have said anything in disagreement. In hind sight, it is very easy for us to say how UNDER VALUED QC was and investing in QC was a slam dunk. At current price, all I am saying that QC is no longer trading at a discount, but FULLY VALUED. Everything you said is correct and had been discussed thoroughly in one form or another. That is indeed the handset, ASICs and royalty company that I am refering to. Lets take $4 as the FY2000 earnings. We are trading at 40 times earning. Don't you consider that "fully valued"? Don't forget when I say fully valued, it does not mean QC will no longer increase in value. Just think, if the PE remains at 40 and QC's earnings grow at 30% from FY to FY, the stock price is going to rise by 30% per year (you do the math), year after year, not bad by most standards. Unfortunately, we are now spoiled by a 6.17 bagger for just under 7 months. I don't think even the most optimistic of the shareholders would expect another 6 bagger for the remainder of the year, or two years, or may be 3 years. However, allow me to provoke, not debate, but thought. What is the new Qualcomm - 2-3 years from now? Is it the same handset, ASICs and royalties company or has it become the giant of the new paradigm, one that has broadband wireless as the backbone. Everyone of us on SI is familiar with the internet. Just picture the new world a few years from now when we have wireless internet. I can think of a limitless number of applications, absolutely mind boggling limitless. Now you can continue to crunch numbers, based on how many subscribers, how many handsets, x% royalties etc etc. In the end, you will find that QC will miss expectation one qtr or exceed another quarter. So the price will oscillate. All the cheerleaders who claim to be long term investors will once again go through the euphoria and depression cycles over 1/2% daily moves. Is that why you invested in QCOM? Just for a 20%, 30% or 40% annualized return? Of course not. <ggg> What I am thinking is this NEW QUALCOMM indeed has the potential to dominate an entire new industry that does not exist right now. When you guys were debating 3G last year, I never got too excited about the subject. Now I think I finally see the picture. A new race is starting and I hope that QC is prepared. Welcome to the thread but make sure you stay on topic and no more of this rah rah cheerleading stuff. <ggg> Ramsey

To: Gregg Powers who wrote (331)	7/28/1999 8:22:00 PM
From: cfoe	Respond to of 13582

Greg - At first I was going to make this a private message, but thought that your excellent piece of work deserved a public acknowledgement. Then I thought I might ask you the following: How are all of those coming "web-enabled" appliances going to communicate with related devices, their home office (for service monitoring, etc.), and whatever else? They are certainly not all going to be plugged into their own phone line, or into an expensive network device. Wireless seems to be the natural solution and CDMA as the winning wireless solution would seem to have the inside track. How far into the future could there be an announcement by some major appliance manufacturer of an alliance with Q to imbed CDMA chips in their appliances? Thanks again. <cfoent>

To: Gregg Powers who wrote (331)	7/28/1999 8:42:00 PM
From: Morgan Drake	Read Replies (1) \| Respond to of 13582

Hey Gregg. Good to see you back. Now why, if you're so hot on QCOM, did you dump half your position? Also, why did you take a powder for a month and a half? Inquiring minds like ours would like to know. Expect to have the Thread hear from you on this. Soon. Morgan

To: Gregg Powers who wrote (331)	7/28/1999 10:14:00 PM
From: gdichaz	Respond to of 13582

Gregg: Recognizing that you have practical limits on what areas are appropriate for you to comments on, could you fill us in on your understanding of the two S stories/rumors - Sony's withdrawal from making phones for the US market and the rumored Siemens involvement with the Q in some arrangement? All still very vague as far as reliable reporting has gone. And so far, no announcements from the Q's management. The Sony withdrawal seems real enough but the details and impact are not clear. Re Siemens this may simply be smoke and no fire or perhaps something real but if so, no clue yet. Comments? Chaz

To: Gregg Powers who wrote (331)	7/29/1999 6:14:00 AM
From: Mika Kukkanen	Read Replies (1) \| Respond to of 13582

Gregg: No, GPRS will not require a complete network overbuild. It is commonly misconceived that it will and would like to know where you got this misinformation. The costs of rolling out EDGE on top could be comparable to overlaying cdmaOne, which would also require new handsets too and at the cdmaOne stage has less data capacity. Problems would also come (in mature markets) by having several technologies within the same spectrum - most used/deployed spectrum in the world is at 900Mhz (GSM, NMT, TACS). For global strategies, it is hard to magine the scenario you portray and the US is not a big enough market to rely on (see Lucent and Motorola's demise in the 2G market). Although I agree with the assumptions of the advantages of cdma2000, it is more applicable in the US environment than elsewhere (i.e., the lack of new spectrum -FCC wants 2G and 3G in the same spectrum). This is where rumours are coming about some operators (only US) that are looking at cdma overlays, although as I stated they are rumours at the moment. Mika

To: Gregg Powers who wrote (331)	1/26/2000 8:06:00 PM
From: Jon Koplik	Read Replies (2) \| Respond to of 13582

Just re-read Gregg's post #331 (as recommended by DaveMg in post #5711). As so often happens, your words were shockingly prescient (apologies to those who do not speak English as a first language) (or, those who don't like "big words"). Reading post #331 now (the day that QCOM dropped about 16% because most people who listened to yesterday's conference call chose to ignore most (if not all) of the explanations of Qualcomm's fabulous future as 1XRTT and HDR come into play) has reminded me again that people still just do not "get" the Qualcomm story. Hard to believe, since your post was written about six months ago ! Jon.