Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: GO*QCOM who wrote (28856)	11/13/2002 12:36:53 PM
From: RalphCramden	Read Replies (2) \| Respond to of 197016

I would suggest that QCOM's past revenues are as high as they are because it has been conquering new world market each year. Before 2000 it was just pure CDMA growth in the world. In the last year it has been upgrades to 1X. If QCOM continues to conquer new markets, add market share, AT THE SAME RATE that it has added it in the past, I would suggest that its revenues will not grow much. That is, if there are 100 MM new CDMA subs per year for 20 years, then QCOM's revenues are pretty much FLAT over those 20 years, or at best growing slowly. In order to have 35% growth a year, QCOM needs to add subs at ~20% increasing rate each year. That is, e.g., added subs would have to be 100, 120, 144, 173 in each of 2002, 2003, 2004, 2005, etc. OF COURSE the possibility that something like this, or something even more spectacular happens exists. What I am trying to figure is the probability of this, compared to the probability that CDMA continues a long but fairly steady growth, which would leave QCOM justifying quite a lower PE than its current 35. I don't think it makes sense to invest based on possibilities only. I think probabilities will yield a better mechanism of choosing between companies with great possibilities. If data had taken off, it would be a different story. But the current PROBABILITY seems to be that data may serve to add a little bit of ARPU, perhaps even an increasing amount to ARPU over time, but that it will be a LONG time before the world pays as much for wireless data as it is willing to pay for wireless voice. In this PROBABILITY, QCOM is probably a slow-but-steady growth company, which means it would be great to buy at a PE of 15, hold at a PE of 20, and you figure it out at a PE of 35. I hope I'm wrong. I'm just trying to explore all probabilities here. The swooshy part of the roller coaster ride may be over, we may be just doing the smaller wobbles while we circle around back to the station. To the moon, Ralph "I am pretty concerned that it is not a growth company anymore" QUALCOMM has 80 percent of the world market to conquer that will be NEW buisness.If that is not growth potential what is?