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

To: slacker711 who wrote (5742)	1/26/2000 2:05:00 PM
From: JustLearning	Respond to of 13582

Slacker 711: I agree that ASICs are the key. The disproportional increase in royalties when compared to increase in ASICs is a mystery to me. My theory: The adjustment to royalties from last quarter was higher than expected and Qualcomm possibly based their royalty estimates (for last quarter) on ASICs shipped and assumption of ASIC marketshare. If the ASIC marketshare dropped more than they expected, then number of phones without QCOM ASICs would have been higher and thus the disproportional adjustment to royalties this quarter. This is purely my speculation. As pointed out in other posts, this is only a 1-2 quarter event. The most important thing is that CDMA adoption rate remains intact. By end of the fiscal year, 1xRTT would be in production, and as Dr. Jacobs mentioned operators will insist that handsets have the new ASICs; they can upgrade base stations as needed once new handsets have this capability. 2001 is shaping up to be "very very" interesting. The combination of QCOM being the only ASIC with 1xRTT capability and operators providing discount to get existing customers to upgrade to 1xRTT handsets (to get the additional capacity) should result in huge number of handsets sales. I was surprised that none of the analysts said anything about China. Dr. Jacobs mentioned that he would be very disappointed if negotiations were not completed by mid-year. Negotiations must be going on very well for him to say this !! I also thought that the enemy ("Ed Snyder") asked an interesting question regarding CSM base-station chips and volume. Dr. Jacobs answer was that most customers used Qualcomm's CSM chips and he did not see any reason why anyone would use anything else. I believe that the number of CSM chips shipped in relation to MSM is low at this point, but at some point 2-3 years from now, this could be add a non trivial amount to revenue. Especially with monopoly Qualcomm has here. I am not technical enough to know the ratio of CSM to MSM, but I am hoping at some point this will provide an upside not factored into the model.