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

To: Jenne who wrote (6191)	2/3/2000 6:09:00 PM
From: quidditch	Read Replies (2) \| Respond to of 13582

Huh? "Rethinking the Q Valuation": some obvious mistaken and/or questionable assumptions/omissions: Assuming 10 million CDMA handsets are sold at $200 per unit in 2001, this is a $2 billion a year market opportunity, and Qualcomm will reap $40 million (2%) in royalty fees per year from China alone($0.01 of earnings per share per quarter). Assuming Qualcomm can sell a few ASICs (chips) to handset manufacturers, it can profit from this as well. 1. "Assuming...handsets are sold at $200 per unit...." I have to think that the average handset price is going to be significantly less than $200 per. As the wireless market spreads in China (and assuming 10 million units in the next year--that is spreading!), I don't think it's fair to assume that the Chinese consumer market will yawn at those prices. Hell, even the US market is not paying $200 average after rebates/specials etc. 2. "Q will reap $40 million (2%) in royalties p/a"--Does the writer know for a fact that Q negotiated a MOT-like royalty with Unicom? Has this been disclosed anywhere else? 3. "Assuming Q can sell a few ASICs to handset manuf's..." Did the writer read the joint press release in which Unicom commited (on behalf of the manufacturers) to buy Q MSMs provided that they were competitive. Is any one else capable of manufacturing working ASICs with features/performance equal to MSM3100, MSM5000s? DSP and LSI may be in the market somewhere, but the press release specified Q as the source given certain conditions. Perhaps it is not unreasonable to conclude that, given the (conditional) ASIC purchase commitment, Unicom negotiated a bargain basement royalty. Steve PS Jenne, thanks for your continued posting (obviously, the tone of this is directed at the writer, not the messenger)