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

To: Jim Mullens who wrote (28951)	11/15/2002 5:38:45 PM
From: John Biddle	Respond to of 197214

First of all, welcome to the best investment thread out there. It is so valuable because of all the great and varied contributions, and you've made a heck of a start. A couple of thing on the chip cost issue: Chips with lots of features, like audio, video, bluetooth, gps, etc, take up more silicon than those without such features. That translates to higher cost because fewer of them can be made per wafer. Turning off features with software/firmware is possible, but not economic. Also, policing what the handset mfg does with the chip is difficult, expensive and creates ill will with the customer. Chips that support GSM/GPRS and CDMA1x will be more expensive to make than those with only CDMA for the reasons above. In addition, they'll be even more expensive while they're getting the bugs out of the mfg process, until they get the yields up to that of their other chips. An extra cost of $10 at the chip level translates to $30 or $40 at the customer end, and that is a big deal to a lot of customers. Not all of course, but enough to matter. “would the reduction in the BOM come into play here?”. I believe it will, since I don't agree that TI has incorporated this into their chips. I believe Q is ahead here. Remember, however, that phones with these chips are 8 months out. Another issue not yet addressed is the cost to a mfg of switching chips and needing new firmware or at least significant changes to their existing firmware. One of the reasons, I believe at least, that NOK is not interested in Q chips, is that they wouldn't be able to use their existing software, something they see as a competitive weapon.