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

To: pcstel who wrote (94147)	2/21/2001 4:34:46 PM
From: arun gera	Respond to of 152472

Just surprised by the profit margin on the Omnitracs business. Obviously,Globalstar phone business is losing money at 2000 phones a quarter. >>If you don't believe me.. Go back and look at QWS margins in FY 00 Q3.. (Over 40% margins).. They shipped 15,000 Omnitracs and 31,000 G* phones.. In the latest report.. QWS has margins of much less than 10%.. 10,000 Omnitracs were shipped and only 2,000 G* phones.. Go Figure!!>>

To: pcstel who wrote (94147)	2/21/2001 6:01:31 PM
From: mightylakers	Read Replies (3) \| Respond to of 152472

Wait a minute. The 580 or so spent in G* is in a period spans over the last 5 years. How can you count that as the expense for last year only?

To: pcstel who wrote (94147)	2/21/2001 11:30:56 PM
From: S100	Read Replies (1) \| Respond to of 152472

You raise some good points. However, from the CC and text. They took total charges of $595 million relating to Globalstar due to the announcement on 16 Jan 2001. The fiscal year closed on 31 Dec 2000, so it seems they took the charges one quarter early. They will not recognize Globalstar revenue in the future until they have cash in hand. Looking at the complete conglomeration named QUALCOMM lets ask a few questions. First: Are they deep in debt and running out of Cash? Hmm, seem to have no debt and about $2 Billion in cash and equivalents, what ever that is. Second: ASIC sales dropping? Hmm, seems not, 15M in last quarter, limited by Fabs. Not too long ago they were bragging about lots of Fab capacity, seems like they blew that. Wonder how many they could have sold if they could deliver, 15.5 M, 16M, 20M ? Third: CSM sales dropping? Therefore no CDMA infrastructure (basestations)? Well hard to tell, since they seem to avoid a direct answer. They always skate around the question by saying that CSM sales are Lumpy and less than 10 percent of revenue. But they did give one datapoint - Backlog of over 3 million channels, so with 32 channels per CSM, about 100,000 chips. Is this the total order and they have not been able to produce any to ship? Or is it perhaps 10 percent of the total with the rest shipped? But they command a good margin, so perhaps the total shipments of CSM are 1 percent of MSMs? How many base stations would this indicate are under construction somewhere? Sorry, my slide rule just overheated and crashed, so will let someone else work the numbers. Per the CC on the $15 Million gain from their portfolio. "We think this is consistent with achieving maximum long term value. What we are doing, as you know, is investing strategically in companies that support the growth of CDMA, either on the operator side or on the device side. And we want to reinvest those funds in new companies that are going to grow. Once it has been established, that once they are on their way, we want to reinvest that money. So we think that by taking these funds, some of those gains as we go, that we can reinvest that money in new companies that are going to drive the growth. So by the phrase, virtuous cycle, here all of the funds that we are generating by royalties we are investing in companies to grow the market, generates more royalties generates more gains on the investment. So these are not necessarily, the investments that we make, are not strategic to us over the very long term. We have achieved our objectives by making them successful." They always seem to have made investments with the cash generated. They started with the cash generated from OmniTRACS years ago to fund the development of CDMA, going into infrastructure and phone manufacture, since there was no other source for that equipment. Many of the investments have turned out quite well, some not so well. It almost seems that they could be regarded as a mutual fund that focuses on one small area and that they should be considered to have inside knowledge. On the other hand, they only invest in very risky companies, once they are doing well, the stock is sold and the funds moved to another risky company. Not being real good at accounting, I tend to view them as several different companies. One sort of mutual fund, one ASIC company, One Patent licensing company and a wireless company with OmniTRACS, Gobalstar phones and whatever. So they had a bad quarter in the mutual fund company, rest may be doing OK. They wrote most of Globalstar off, $70M or so left. We will know, as they say, "in the fullness of time".