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To: Art Bechhoefer who wrote (119324)	5/26/2002 10:58:06 AM
From: kech	Read Replies (1) \| Respond to of 152472

I just listened to Keital again. It is about hour 2:00 of the presentation. His point was that they have shipped 30 million chipsets. There are 9 million reported 1x subscribers announced. This doesn't even include the 1x phones sold at Verizon, Sprint and others who have not officially announced 1x programs but are selling the phones nonetheless. In a normal environment they think there should be 13 weeks of inventory. This would be about 18 to 22 million chipsets. In addition there is a transition underway from IS95A/B, implying the target maybe should be somewhat higher. He didn't say this, but if you assume that Verizon and Sprint have already sold 4 million chipsets (my guess) then that would mean there are 30 million - 9 million (announced) - ( 4 million at Sprint/Verizon) this would result in 17 million 1x chipsets in the channel. Even if you add in the 4 million IS95A/B chipsets that Soundview is worried about, that brings the total up to 21 million chipsets in inventory which is within the desired range of 18-22 million. This doesn't even include the desire to have additional chipsets available for the product decision. As Keital said, "we don't think there is any excess inventory problem".

To: Art Bechhoefer who wrote (119324)	5/26/2002 1:02:37 PM
From: John Carragher	Respond to of 152472

Art. Dr. J addressed the question of excess inventories on cnbc over a week ago when questioned hard by the guest. He explained the build up is not excess and will be worked off. You have a number of phones being build and debugged. He went on further to explain the phones are now being manufactured and the chip inventory will be there for the expected increase in demand. imo It only makes since to build ahead of a large demand for the chips. Certainly better than getting into a back log. Have a safe holiday weekend.