<<Mike M.: You are dead wrong on Qualcomm.>>
Speculation, opinion, etc. I'll set you straight <g>
<<particularly when it has even less visibility going forward regarding earnings than most tech stocks.>>
Did you hear about the little thing in their conference call that their book to bill is well north of one and they expect capacity constraints to be resolved at some point in the third quarter, in parallel with heavy investments on FAB plants in China via the CHIPpac route. Nokia adding handset manufacturing resources to korea, for the growing korea CDMA market? How about their PR released Friday, about the royalty reports coming in being stronger than expected, a lil subtle upward guidance. <I'll come back to that later where you talk about getting short squeezed at earnings>
About your No stinkin 3G, you think all restaraunts will be retrofitted with Wireless LAN (WLAN)? I don't know many people in the industry that can lay down 100$ per seat networks and afford a new job opening for 'Senior Restaraunt Network Administration', the job market is tight some well placed corps are having trouble filling their positions and now someone will want to work at the local deli as net admin as opposed to the branch office of Oracle... please. IMO, portability will be eaten alive. Those investing in portable solutions will have a limited window of oppurtunity, which is the same card that metricom and WAP are playing. OOPS.
Availability of applications usually come after a market is created, witness PC-land. There are many similarities in the PC market and the cell phone market, especially when dealing with wireless internet and applications. The internet was made, the internet was ho hum, the internet attracted people. Business' saw the internet attracting people, business' set shop up. I don't see why m-commerce and m-services will be any different. Simplifying life is a powerful movement.
<<First, there is risk to replacement sales in 01 and the estimates for handset shipment is still being lowered and (IMHO) is still too optimistic. Second, the wireless industry is overly optimistic in its expectation for the replacement rate in 2002 due to GPRS services. 3G deployments will be delayed because of: (1)interoperability issues; (2) technical issues, and (3) lack of handsets. These same factors will also delay deployment of WCDMA past 2002 into 2003-2004. Even Qualcomm's CEO Irwin Jacobs doesn't see 3G services being commercially viable until late 2004 or early 2005.>>
Ouch, a few problems I have with this line of points is(one by one):
Handset shipment figures and guidance is being lowered by companies who are losing market share.
GPRS is a caught fish outta water, soon will be dead.
3G Deployments for WCDMA(UMTS) are being delayed, because the product doesn't work and can't be made to work by corporations that can't fully understand nor implement cdma systems blowing smoke up carrier's collective *** in Europe. Europe is not a market for qualcomm, so nothing has changed, noone has Europe built into qualcomm's earnings model and if they did they are a poor analyst. Qualcomm's CEO Irwin Mark Jacobs said WCDMA will not be viable int hat timeframe, but Korea is in process of buildout and USA has their buildout Roadmaps and are executing to plan. CDMA2000 is not delayed. WCDMA is. CDMA2000 Works, WCDMA is facing their glitches as is GPRS.
<<Other factors which are in play are: the massive debt European telecom companies have amassed following the wireless spectrum auctions. These companies are now capital constrained and are hardly likely to invest in 3G services that do not have a clear path to profitability. >>
Again, Europe is not in the revenue model for Qualcomm, its all Gravy, but I'll bet you didn't notice the 450mhx CDMA plans in Romania? Wow, that is an upside surprise given Europe is not factored into any revenue/earnings models for the company! WCDMA doesn't have a clear path to profitablility along the lines of 'Well, we don't have your product yet, but its coming and it will be good!' CDMA2000 is here, building, shipping, and works. If anything is clearer than that, can I replace my car windshield?
To Summarize my humble rebuttal against your summary in point counterpoint mode:
- the combination of decreasing handset sales
GSM only
- 3G deployment delays
WCDMA only, CDMA2000 in existing spectrum is rolling out as planned FAR ahead of a non-joke WCDMA(UMTS) system
- capital constrained European telecoms
Will need to roll out technology that works and is available, dontchathink?
- earnings revisions are ahead for the wireless sector in general and QCOM in particular
Yes, euros bent on a saturated GSM market who got blindsided by their ignorance for a growing CDMA market will need to be revising. QCOM in particular, why? Their book to bill is well north of one, their royalties are up there. They are updating licensing agreements to several corporations still. CDMA is on buildout in China, WLL CDMA is on the go in India, USA and KOREA carriers are and will be enhancing their offerings on updated CDMA equipment. Rumors of a USA carrier taking the 1xEV CDMA path to 3G.
- the lack of visibility of 2.5G and 3G deployment should raise red flags with investors
Can I change this to the lack of visibility should change carrier's minds about what they are wasting their money on? Korea has a nice market and they have exciting stuff going down. GPRS is widely visible as a conjob. before: 140kbps data and 3X voice capacity. FACT: lucky to hit 40, 20s most likey <equivalent to 3 year old CDMA technology> except the bad-effect of increased radiation emissions.
Shorting for earnings, witha book to bill greater than one, them seeing higher royalty statements than expected, why short someone who looks like they are comfy with estimates? Especially in this market, corps aren't being punished for hitting estimates anymore, as they foolishly were in the 99 year.
Hope I've cleared soemthings up!
BTW: Ouch, I wish i was a short on Monday and closed Friday !!!! =] |
