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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Ken S. who wrote (8648)	3/16/2001 10:03:12 AM
From: Eric L	Read Replies (2) \| Respond to of 196487

Ken, re: Some comments on forecasting sub growth. << QCOM's 90 mil projection of chips this year, far exceeds this forecast >> QCOM has forecasted 90 million handsets (not chips) this year. That 90 million is net sub adds + churn + replacement sales. If QCOM grows its net sub base a very reasonable 55% this year from 82 million at YE2000 then it will need 45 million replacement + churn sales to achieve a 90 million handset forecast. This replacement rate (54%) is pretty steep. QCOM probably needs closer to 60% growth this year to make the 90 million handset number. This is not impossible. Like TDMA however, CDMA augments its "replacement" figure with AMPS conversions. << By these rates, year 12 (unlucky 2013) we exceed GSM's market share >> This dog doesn't necessarily hunt, math wise. "Cellular growth" peaked in 1999. Absolute growth will decline year to year going forward or best case hold steady in some years. The 39%/20% CAG rates for a 5 year projection imply >39% & >20% in the initial year, declining each year, as the total subscriber base gets larger, We should be looking at 50% to 60% growth this year, hopefully to the high side, and hopefully hold that again next year as Unicom kicks in. One of the reasons that TDMA jumped ahead of CDMA in YOY growth and became the "fastest growing" technology, is along the way CDMA actual subs exceeded TDMA actual subs. The law of large numbers kicked in. Hopefully, thats a short term anomaly. << I think the short term growth rate for CDMA is higher based on QCOM' projection >> Right. Same for GSM although EMC is only projecting 21% growth for GSM this year. They are very conservative. Last year they projected 40% GSM growth, and GSM grew 60% to CDMA's 62%. Strategy Analytics obviously projecting GSM growth (and worldwide all technology growth) somewhat more aggressively than EMC. I should point out to that it appears in the SA report that they are including W-CDMA in the GSM numbers. Several research houses are breaking 2G//2.5G GSM out separately from W-CDMA, so there are some numbers that have to tumble into the QCOM CDMA column for purposes of looking at royalties. Bottom line is that at some time "CDMA" will be the most widely deployed air interface, and the majority of handsets shipped will be "CDMA" - 2006? 2007? 2008? The sooner the better. - Eric -