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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (10688)	3/13/2001 10:46:11 AM
From: slacker711	Read Replies (1) \| Respond to of 12823

What's going to happen now that mobile phone sales appear to be ramping down their torid growth rates? What am I missing? The numbers that you listed for revenue include the revenue associated with the handset division for the Q1/Q2 '00 as well as FY '99. They completed the sale of the handset division in Feb. '00. However, your question still stands....even after removing the effects of the handset division, you will see Qualcomm had an essentially flat revenue year. To put it mildly, 2000 was not a great year (business-wise) for Qualcomm. The primary reason for the flat revenue was a ban by the Korean government of handset subsidies. The sales to Korea fell through the floor during the second half of the year. The bullish case for Qualcomm revolves around the fact that CDMA networks are currently installed in a small portion of the worlds networks. Thus far, Japan, Korea, North America and South America have provided nearly ALL of Qualcomm's revenues. The largest networks in the world are located in Europe/China and these markets have effectively shut Qualcomm off from any revenue. However, most of the world's current GSM operators have comitted to W-CDMA as their 3G technology of choice. If W-CDMA is rolled out anywhere near schedule, the revenues/profits that Qualcomm will receive are staggering. Last year there were about 65m CDMA handsets sold (out of 410m)....this year projections are for 90m (out of 475m). This is not the sweet-spot for Qualcomm's growth. That will come during 2003/4. This is when the commercialization of W-CDMA comes on a worldwide scale. Nokia (the most conservative of the W-CDMA proponents) expects 6% of the handsets sold in '03 to be W-CDMA. This would translate to appoximately 36m handsets...that would likely have an ASP well above $300. Qualcomm will receive arround 5% of the manufacturers sale price of the phone as a royalty ($500m-$600m). This is only the beginning of the hockeystick. The various estimates beyond '03 are all over the map....but suffice to say that if 3G follows the implementation pattern of digital vs analog, Qualcomm should see billions in royalties during the second half of this decade. The other half of the equation is chipsets. Currently, Qualcomm has a marketshare around 80%. This will inevitably fall with the introduction of W-CDMA...but the expertise that Qualcomm has developed should allow them a significant share of this market (anything above 20% is a huge victory to me). Also, the basic fact remains that they will be expanding their target market by an order of magnitude. Hmmm....even with the length of this post, I am not sure that I am really answering your question. However, I know that if I wrote the post with a neat table filled with numbers, that many of them could easily be shot down. The key question for Qualcomm is the roll-out schedule for W-CDMA. If it is rolled out quickly, they will benefit enourmously. If it does not, they will need a roll-out of 2G CDMA in China/India to support their growth. Slacker

To: MikeM54321 who wrote (10688)	3/13/2001 11:38:08 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 12823

Mike, Slacker has again done a good job. I got sucked into reading another El Matador post and he got something else right = people will abandon wired phones and use wireless. They'll do that when talk is cheap and the effort of getting up to walk to a wired phone and having a place instead of a person with a phone number [or preferably a url when voice over IP is in business] is too much hassle. That time is coming very soon for the masses and for many people is already here. Leap Wireless for example has many customers without a wired phone. The revenues don't matter. Look at the bottom line [and R&D investments]. Q! is no longer a low margin handset maker [other than for Globalstar]. Their profit margins soared as royalties became more dominant. That process is just warming up. The rate of adoption of CDMA is huge with only 100 million subscribers out of something like 2,000 million in 5 years. Prices are reaching yakkity-yak rates for billions of people. Spectrum is limited so spectral efficiency is the vital ingredient for service providers in a price war and clamour for market share and global coverage. Korea's dominance of the CDMA subscriber market is shrinking. That process will accelerate. Interesting additions such as TimeDomain's pulsed broadband monocycles, Bluetooth and OFDM will make communication devices extremely powerful. Throw in BREW from QUALCOMM and hordes of applications and 5G will be very interesting indeed. With Q! at the centre of it all. Mqurice