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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: waverider who wrote (71076)	4/22/2000 1:15:00 PM
From: waverider	Read Replies (1) \| Respond to of 152472

Part III from "identies" On chip sales forecast for Q3 there were several interesting comments by management. In {Q2 CC} they stated, that the estimation of 14.5 M chips for Q3 was valid for the end of Q2 that now (18-4-00) the orders are SIGNIFICANTLY higher. Also Jacobs mentioned during the interview on CNBC that they will beat 14.5M by an INTERESTING numberŒ {CNBC interview}. This will play a major role in my calculation of earnings. And here comes a long shot [G][G][G]: China is already putting in significant orders for MSM and CSM chips. Who else would order high chip volume (SIGNIFICANTLY higherŒ and INTERESTING numberŒ) during the first 18 days of April. Another indication supporting this assumption is the comment by Brian Modoff, DB Alex Brown, that their industry contacts indicate that networks are being built though this has not yet been officially published {Modoff interview on radiowallstreet on 19-4-00}. QTL(Licensing and Royalties): Now this is of course difficult to guestimate. However, in my model I assume that the ratio of chipset sales and royalties should roughly be the same as in previous quarters, due to the fact that the market share of QCOM chip sets appears to be constant going forward {Q2 CC}. General observations: - Tax rate for fiscal 2000 should be about 38% - Pro Forma margin is around 41% - YE 2000 subscriber numbers, according to Jacobs should be between 65M and 75M {Q2 CC}. This appears to be conservative considering historical growth rates[G]. Nevertheless (please take the following remarks with a grain of salt, since it is a very simplistic comparison and probably not at all accurate), there could be a correlation between SUBS and chipset churn out. At the end of 1999 there were 50M CDMA subscribers worldwide {www.cdg.org} while QCOM had cumulative shipment of over 200M chips at the end of 1999 {Q1 press release}. Now this is a 1 to 4 ratio. Assuming 70M subscribers by YE2000, this translates into 280M chipsets for QCOM [G] assuming constant market share and NOT taking into consideration the increased replacement rate for handsets due to the higher subscriber rate. Difference, a whopping 80M chipsets for 2000. QCOM sold already 14.5M+11.2M=25.7M, so only 54.3M to go. Again, this is very simplistic and can therefore not be used as a base for the model. - On a negative note, Motorola has not been licensed for DS-CDMA(WCDMA) which could have been an indication for Motorola accepting QCOM¡s IPR for WCDMA. Well, hope they will come around sooner or later anyhow. - Brian Modoff estimates calendar 2000 earnings to be 1.17 and calendar 2001 to be 1.51. For to 2002, though no number were given, he said that earnings should be accelerating for a couple of years due to the 3G development. 3 year growth rate is at 40%, which translates [G] to 2.29 in 2002 and 3.21 in 2003. I certainly hope he is not right on this one.