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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (43354)	6/10/2001 11:28:20 AM
From: Eric L	Respond to of 54805

Mike, re: Qualcomm and the CDMA subscriber growth metric. << If we compare the total subs in any given quarter to the previous (sequential) quarter ... in the quarter ending in December 1998. At that time the increase was 44% and it gradually declined to 8% in the quarter ending in September, 2000. Each of the two most recent quarters were 12% and 13%. Maybe that bit of data has bottomed out at 8%. >> Maybe it has, at least for the foreseeable future. We just experienced a horrendous quarter in Latin America. I suspect some prepaid subs were smoothed out by CDMA carriers in Q1, and their was probably excess inventory in the channels. Hopefully Korean subsidies which started the CDMA slide in Q2 2000 will be reinstated, and 1xRTT will start to have positive effect on Korean numbers while Latin America restores from whatever anomaly occurred. There is one very important positive indicator in this quarters mobile wireless subscriber numbers that I see, and although I never take a single quarters numbers to be indicative of a trend, I do think that final quarter 2000 may have been a bottom of the declension of CDMA subscriber growth and indicate a reversal. As you recall, commencing in early 1997 and continuing through Q2 end 2000, CDMA was the "fastest growing technology" on a YOY basis. The positive indicator I see is that while growth has slowed (all technologies) CDMA has the highest market penetration it has yet achieved (for all technologies) and has broken the 12% barrier, and has gotten back up over the 13% mark for digital market share. Here are the last 3 quarters numbers: Latest Quarter - Q1 2001 CDMA = 12.08% of all (up from previous quarter and 2000 year end) CDMA = 13.2% of digital (up from previous quarter and year end) End of CY 2000 CDMA = 11.45% of all (down from previous quarter but up from 1999 end) CDMA = 12.71% of digital (down from previous quarter & down from 1999 end) End of Q3 2000 CDMA = 11.75% of all (up from 1999 end) CDMA = 13.41% of digital (down from previous quarter and year end) Previous posts on this subject (last 3 Quarters): _________________________________________________________________ Mike, re: CDMA - QCOM - Quarter Ending 2001 Official Subscriber Growth Numbers ================================ MOBILE WIRELESS SUBSCRIBER STATS ================================ Through end of March, 2001 Total Worldwide Subscribers (millions) 682.9* = digital (excludes ESMR & PHS) 65.3 = analog 748.2 = total mobile wireless (excludes ESMR & PHS) CDMA = 12.08% of all (up from year end) CDMA = 13.2% of digital (up from year end) =================================================== TDMA: 40.9 M to 68.3 M subs + 67% YOY Growth GSM: 294 M to 488.5 M subs + 66.1% YOY Growth CDMA: 57.3 M to 90.4 M subs + 57.8% YOY Growth _____________________________________________________________________ Mike, re: CDMA - QCOM - Year Ending 2000 Official Subscriber Growth Numbers << sequential growth rate has rebounded from horrible Q3 numbers >> FWIW: I have always thought that looking at quarter to quarter numbers sequentially in mobile wireless doesn't generally have a lot of significance, except for Q4, which is always a blow out quarter (unless capacity or component constrained as happened to GSM in 1999 ... giving rise to an unusually strong GSM Q1 2000, which is generally a slow quarter as it was for CDMA last year). ================================ MOBILE WIRELESS SUBSCRIBER STATS ================================ Through end of December, 2000 Total Worldwide Subscribers (millions) 633* = digital (excludes ESMR & PHS) 69.3 = analog 702.3 = total mobile wireless (excludes ESMR & PHS) CDMA = 11.45% of all (up from 1999) CDMA = 12.71% of digital (down from 1999) =================================================== TDMA: 35.1 M to 61 M subs + 73.8% YOY Growth GSM: 254.4 M to 440.7 M subs + 73.3 % YOY Growth CDMA: 50.1 M to 80.44 M subs + 60.6% YOY Growth * Source: EMC with their numbers of total subs reduced by official UWCC counts for TDMA and CDG's official counts of CDMA. EMC reported 637.8 million digital subs but estimated 81.9 M (instead of 80,44 M) for CDMA, and 64.3 M (instead of 61 M) for TDMA. I have reduced EMC's number by 4.8 M to 633 Million. Feel free to check my math. Not my forte. One comment on the subscriber metric. Accounting for prepaid subscriptions is tricky. Adjustments are made differently region to region and carrier to carrier. Consequently adjustments can hit in any quarter. This is not exclusive to GSM, but since their subscriber base is larger than CDMA and TDMA, "double counting" of subs is more prevalent there. Example (recent)below: >> Vodafone Alters The Way It Counts Its Subscriber Base Vodafone UK has said that it intends to alter the way it counts its subscriber base. Currently the company does not deduct from its figures, users of PrePay phones that have not used their phones for a long time and are probably not intending to use the phone again. Vodafone says that this will remove an estimated 9% over reporting in its subscriber base. As the telecoms industry moves to concentrate less on subscriber numbers, and more on the revenue per user (ARPU), by reducing the apparent number of subscribers, without reducing the actual cash generated, this automatically raises their ARPU figures. << One additional comment. We are moving more an more to a replacement market. Absolute net sub growth will decline, or best case, hold steady. Year over year. Replacement sales will increase. Handset sales are probably a better metric than net sub growth than subscriber growth to track the wireless data and multimedia tornados. Handset sales by technology is a little more difficult to get at than sub numbers however, and sub numbers are still important because they are the base for replacement sales. _____________________________________________________________________ Slacker, Re: Worldwide Mobile Wireless Subscriber Growth Official through Q3 2000 Sources: GSMA (EMC), UWCC, CDG - Tables and Press releases These were the estimated actual numbers that EMC posted in early July: GSM: 271 to 331 subs = + 18.1% YTD Growth CDMA: 50 to 65.9 subs = + 34.2% YTD Growth TDMA: 35.1 to 47.1 subs = + 36.2% YTD Growth I've adjusted the America's count through Q2 here: North America Subscribers: TDMA = 24.6 million CDMA = 23.1 million * Good news for CDMA in NA - Narrowed the gap from 22 million TDMA v. 18.5 million CDMA through Q1 2000 * CDMA is about to become the dominant digital wireless technology in North America, finally overcoming TDMA's earlier time to market advantage. Latin America: TDMA = 20.5 million CDMA = 8.7 million * CDMA is holding it's own in LA but not overtaking TDMA which had a huge head start. Although EMC was 2 million high on their CDMA actual estimate, they were only .7 million high on TDMA. Pretty close. Based on this I think we can take their recently posted subscriber numbers through August conclusion as being pretty accurate as well. ================================ MOBILE WIRELESS SUBSCRIBER STATS ================================ Through end of September, 2000 Total Worldwide Subscribers (millions) 536.8 = digital (excludes ESMR & PHS) 76.8 = analog 612.8 = total mobile wireless (excludes ESMR & PHS) CDMA = 11.75% of all (up) CDMA = 13.41% of digital (down) ================================ GSM: 271 to 361.7 subs = + 33.5.1% YTD Growth CDMA: 50 to 72.0 subs = + 40 % YTD Growth TDMA: 35.1 to 54.3 subs = + 54.7% YTD Growth ================================ Looking for a strong CDMA finish. Still a horse race for "Fastest Growing Technology" in 2000. In order that CDMA remains the "fastest growing" technology end of year, I urge all to go out and replace your CDMA mobile phone. <g> - Eric -