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

To: quidditch who wrote (2899)	11/3/1999 8:39:00 AM
From: brian h	Read Replies (2) \| Respond to of 13582

Steve, Per Dr. IJ. through CC, MOT do buy and use QCOM's chipsets either directly from QCOM or through its Korean subsidiary. Reg. China, Slick Willie may want to get a WTO agreement with China now to finish his term with a win in his foreign policy. The question is how fast can both sides compromise. Hard to say. The issue of CDMA in China is not just politics any more. China want a cheaper deal (ie. IPR rate) that will not only save some bucks but also some technology and manufacturing knowhow for its companies in China. China is concerning more about 3G than 2G now unless it gets a cheaper deal from QCOM and US on CDMAone. Regards, Brian H.

To: quidditch who wrote (2899)	11/3/1999 11:11:00 AM
From: DaveMG	Respond to of 13582

Anybody hear anything about chipset sales to MOT? Arghhhhhhhhhhhhh. Quick take on the important aspects of call: * The big one...40 mil phones this year, 70mil next with room for upside according to IJ * First Commercial Launch 1XRTT end 2000,up to 384kbps within CDMAone bandwith and fully backward compatible. IJ sounds very optimistic about 1X, " doubles voice capacity all other things being equal", expecting operators to skip interim solutions in order to achieve this capacity gain... Not sure I understand the full meaning of backward compatible. Sounds like a new Base station card is required for the upgrade which provides 32 channels on a chip, that any IS95 phone will be able to communicate with this new chip and that operators will gain spectral efficiency regardless of the phone in use, but that to take advantage of the new data speeds at the handset end phones with subsequent gen ie post MSM3100 chip required. This upgrade sounds pretty cheap from an operators POV and QCOM seems to be saying that this upgrade is much easier than GPRS/EDGE which attempts to accomplish similar feats. Does anyone understand what types of compatibility issues are present with GPRS/EDGE? IS GPRS also just a new card plugged into the base station? What about EDGE? And aren?t there configuration issues? HELP! * IJ doesn't expect to see 3G direct sequence networks until 2003. What does this mean for NTT? * HDR.. Lots of excitement from IJ, hopefully he's not alone. Big demo next week in San Diego. Up to 2.4 megabits within CDMAone bandwidth, USING STANDARD COMPONENTS. This should be a big deal. Operators can roll this stuff out very inexpensively, presumably taking advantage of underutilized spectrum hence it's win/win for everybody, although I guess there isn't gonna be much spare capacity in downtown NYC. * Royalties: Year over year 454 vs 290 which includes royalties "paid" by QCP Y/y 326 vs 214 mil ?external? royalties 113mil this quarter "external" Interesting question from A.Cena who noted that when one looked at segmented accounting it seemed that royalties "paid" by QCP totaled approx 10%, TT answered that no 5% is about right? but that of course this royalty has to be paid for chipsets as well as when handsets are sold, about as explicit a statement as we've ever gotten on royalty rates. * Chipsets: Revs 1.1 bil vs 880mil Earnings before tax: 428 vs 258 Operating Mgns 38% vs 29%.. So that despite the dropping ASPs noted by S.Maslin profit margins are expanding. BTBill around 90%, seasonal factors plus shorter lead times the cause, still expect sequential increase in ASIC shipments. MSM3100 start shipping in Feb?, around Sept crossover where MSM3100 will overtake MSM3000 as leading chip seller. MSM to offer significant functionality increase, 300hrs standby, only chip on mkt at 64kbps, expecting (this might the kind of wishful thinking we've heard in the past) ASPs to actually rise. * Otracs: 10% y/y growth, G* contract rev decreasing, already shipped 10k tri- mode phones Nobody asked about Wireless Knowledge unfortunately. I'd like to hear what's going on, what the firewall problems are, when they expect to be resolved. Seems to me WK is going to play a crucial role enabling wireless data, IF they can ever get the thing off the ground. 1.6bil in CASH$$$$$$$.. Oh my, vat to do?

To: quidditch who wrote (2899)	11/3/1999 5:21:00 PM
From: Clarksterh	Respond to of 13582

Segment reporting in the earnings release [major evolution, makes Q results much more transparent] I'm surprised that there isn't more comment on this. This is a big deal. Not only does it make it much easier to tell what is going on within the company, it also implies that management is confident in all segments. It also lessens the chance of a future faux pas like the handset 'profits' which actually came at the expense of ASIC/royalty profits. Dr. J - Thanks. Clark

To: quidditch who wrote (2899)	11/5/1999 1:59:00 PM
From: cfoe	Read Replies (3) \| Respond to of 13582

Read your analysis of the call a couple of times and have some comments and/or questions: 1-Segment reporting in the earnings release ... shows handset lost $39,983 pre-tax in FY99, which, pro forma the sale of the handset division, would add about $.13 cents per share on an after-tax basis (if my calculation is correct) for the year--using 194,220 weighted average shares outstanding. > If I divide $39,983 by 194,220 (000s ignored) I get .206 cents per share. I am missing something? Also, using segment reporting results as the numerator we are assuming that royalties and ASIC sales prices charged internally will be the same as charged to handset division buyer. I think this is safe to assume. 4-TT gave guidance of mid-$.90's sequential Q1 earnings for 2000; [very conservative, especially given estimates that management was comfortable with projections of 70 million ASICs for FY2000; either that, or ASP erosion will be far worse than this quarter--more on this topic below; from $.91 to estimated $.96, let's say, is not exactly what you would call stellar sequential growth]; > Someone did say on the call that ASP erosion had substantially lessened, maybe even stopped in the current quarter. 7-INTC and DSP--IJ said they were looking at it, would probably do the deal [the interesting comment that caught my ear was IJ's characterization that there were "important" issues in this negotiation--I think that Q is going to evaluate it long and hard]; > A number of us on the thread speculated that INTC would not have gone through with DSP purchase without QCOM's prior OK. Maybe that is not what happened. Maybe INTC has an escape clause in its deal with DSP in case it does not get a CDMA license. Based on Jacobs comments, I am wondering if it wouldn't be "gorilla-like" for a company like INTC to go forward and "assume" QCOM would come around. I am beginning to think these may be interesting negotiations. 9-non-recurring charges to income for Russia/Ukraine were taken in the quarter; > I believe they said that they wrote off their entire investment - 100% 10-HANDSET DIVISION SALE: Had preliminary discussions with several prospective purchasers. IJ said the priorities in getting a deal done were a) keeping commitments to customers; b) getting a buyer with strong marketing and branding; c) strategic ASIC purchase commitments--10 years [I think IJ said]; and d) price. Hopes to announce by year-end. [This becomes a bit worrisome to me: sounds no closer to a deal than at the end of September--would be a major hit to the Q and the share price if management doesn't get a clear and unequivocal positive out of this transaction--a little like saying what your sin qua non is going into a game or a deal and coming away without it--jmho]; > When Dr. Jacobs was on CNBC and was asked this question he looked to me like the proverbial cat who had a bird in his mouth. After seeing him answer the question, I am confidant a deal will be done. 13 - ...Don Schrock [been very impressed by him in the last two CCs and at NYC analyst meeting] > Can you tell me what he does? I did not catch it on the call.