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

To: Clarksterh who wrote (527)	8/4/1999 3:36:00 AM
From: Bux	Read Replies (2) \| Respond to of 13582

How do earnings for the current quarter look? My guess is alot more thinphones will be sold this quarter than all the other models combined. I base this on the fact that Qualcomm has priced this phone at a very attractive price and since the cost to manufacture it is less than any of their other models, this is not likely to change. We know that margins on the Thinphone should be the highest ever, but by how much? I have the impression that management is very enthused about this aspect of the Thinphone. Also, since the Thinphone comes with a very small battery, which is more than adequate for the efficient CDMA use of the phone, but totally inadequate for extensive analog use, I think many users will be purchasing a supplementary battery for this reason and also to take advantage of the hot-swapping feature of this phone. The additional slim lithium-ion battery I purchased with the Thinphone says it's made in Japan and I think I paid about $60 for it. I wonder what percent of this is Q profit? I'm guessing it's a lot more than 10%. In any case Qualcomm will sell more batteries with this phone than the 820 and 1920 models. I don't think anyone else offers batteries for the Thinphone so how long will the Q have this lucrative market to itself? And what about data cables? By fall quarter these could be a significant source of revenue as well. Looks like the Thinphone has proprietary plug-ins, not some off-the-shelf plug-in. I expect a margin improvement surprise this quarter brought on by manufacturing efficiencies (volume, experience and design refinements). I don't expect much (if any) erosion of ASP's since component shortages (if any) should keep any one manufacturer from dumping large quantities of handsets on the market at low prices and the Thinphone is really a high-end handset priced in the middle of the road. I assume component manufactures try to be fair to all their customers when there is not enough product to go around and give all of them a percent of the required amount? Or, even better, would a Gorilla like the Q get preferential treatment? In any case we should remember that management stated that component shortages impacted last quarter sales and MAY impact future quarters but that they have been working closely with suppliers. I take this to be not much more than the usual forward looking caution, not a sure thing or even necessarily a probable thing, just a possibility. The mention of this potential problem was wise and forward thinking. Qualcomm is ensuring they will be able to beat expectations once again which, the way the estimates are coming in, is looking like a sure thing. Bux

To: Clarksterh who wrote (527)	8/4/1999 7:34:00 AM
From: John Stichnoth	Respond to of 13582

Just a note on the eventual structure of this market: It needs a second source of ASIC's to best thrive. It's bad enough (from the handset mfrs' and telcos' point of view) that they have to rely on one company for the basic technology. It's worse that they then also have to rely on this same company--and only this company--for physical delivery of an item. Typical structure would be for the lead company to control something like 70% of the market (in this case of ASIC's), with the second company controlling 20%. Q has addressed the market's concerns partially, by contracting for fabs with more than one company (if I understand this right), but that only addresses part of the handset mfrs' and telcos' concerns. So, in the light of the morning, I am not troubled that another asic manufacturer might be coming into this. It's needed for optimum growth of the market. Best, JS