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

To: Caxton Rhodes who wrote (49212)	11/28/2001 5:38:53 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 54805

You are nuts. if you're going to bother responding, please make some semblance of an analysis based on logic. that begins with numbers. saying things like "you are nuts" is what i have come to expect out of QCOM fans, but it is no substitute for analysis. as for growth rate, the industry's numbers do not justify a long-term 20% CAGR outlook in my opinion. NOK, e.g., is forecasting only 380MM units for 01. i imagine they have a good handle on this year's numbers since the year is almost over. i don't buy these claims of 20% CAGR for a decade on end, since those claims are made by all the companies who forecasted 550 million units to be sold in 01. basically, imo they are pulling numbers out of the air. at this point, with high penetration in the developed world, handset sales will more closely track world GDP than any fantasy flying around in a Bubbleonian's head, in my humble opinion. i forgot to mention that in my wildly optimistic analysis of QCOM (the only kind of analysis whereby i could see them reaching $600 a share in 2010), i was assuming that QCOM gets a royalty on every single one of the nearly billion handsets to be sold in 2010. putting it another way, that assumes the tiny CDMA share of the global handset market today grows well in excess of whatever the aggregate wireless handset growth rate is (contrary to its performance recently), to the point where CDMA has 100% market share of handsets. yes, that is the QCOM dream, and i'm assuming it happens! but back to the numbers. as i see it, the gross sales of royalties and chips needs to be assumed at a rather generous $100 a handset! since QCOM's current pro forma earnings take relative to global handset sales (per NOK's 380MM) works out to around 59 cents per handset (inclusive of all handsets sold, both CDMA and otherwise), i'd say QCOM has its work cut out for it to raise that number from $0.59 to $100, even as handsets nearly triple in quantity. i further make the unbelievably generous assumption that QCOM, a company that has managed to add almost zero in terms of book value over paid-in capital in its entire existence, suddenly becomes a very tightly run ship that keeps 25 cents of every dollar it takes in as sales--that is something no $100 billion sales company has come close to accomplishing.