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: Jim Mullens who wrote (32154)	2/8/2003 11:27:22 PM
From: cfoe	Read Replies (1) \| Respond to of 197809

Is there a lag in the recognition of QTL licensing revenue? I can answer this one. Yes there is. Drop off probably resulted from the extraordinarily large number of MSMs shipped in the Dec qtr. We should see the effect of this lag in Q2 earnings.

To: Jim Mullens who wrote (32154)	2/9/2003 12:24:31 AM
From: puzzlecraft	Respond to of 197809

Impressive set of questions. As for #8, I recall that question being answered a couple years ago (I forget who / exactly when), - wholesale ASP of the PC Card - but later someone else answered the question as a percentage of the overall device with a maximum $ per device to avoid large $ for items like notebook computers.

To: Jim Mullens who wrote (32154)	2/9/2003 1:34:06 AM
From: brational	Read Replies (1) \| Respond to of 197809

Jim-- You have put together a thorough and well thought-out set of questions. Do you get to submit them ahead of time, or do you actually have to stand up and read them at the meeting? I think I can answer # 12: 12. A Gartner analyst sometime back was quoted as saying “ Those carriers that adopted GSM1x would be isolated from lucrative roaming contracts with other GSM carriers”. It is my understanding that there are no technical issues that would prevent roaming among GSM1x and GSM/GPRS networks. What was the Gartner analyst referring to? I believe the roaming in question would be for subscribers on GSM networks with WCDMA (so-called 3GSM...) who would be unable to then roam on GSM1X networks (other than for voice use). So, if Unicom adopts GSM1X instead of WCDMA for its current GSM core network, it will be unable to enter in contracts that would allow it to serve WCDMA customers from Europe or Japan who might be visiting in China. There is both an issue of a different frequency band, as well as an incompatible air interface. Of course, given the current state of WCDMA deployment, such potential roaming revenues might pale in comparison to the likely roaming revenues from actual 1X users. BR

To: Jim Mullens who wrote (32154)	2/9/2003 7:58:28 AM
From: rkral	Read Replies (1) \| Respond to of 197809

Jim, that's an excellent list of prospective questions. My suggestions and comments .. 1. I believe QCOM has already indicated the price premium for the extra capabilities of the MSM6300 would be modest. Don't remember the conference, the speaker, or the "relative to". 3. re "a lag in the recognition of QTL licensing revenue?" I agree with cfoe .. there is a time lag. Saying QTL royalty* revenue* would sound better IMHO. Also, if you're going to ask a "quarterly" question, I suggest presenting quarterly numbers, rather than annual ones, and getting the quarterly numbers might answer the question. 4. re "How does Qualcomm 6xxxMSMs stack up technology/functionality/cost wise with the competition- TXN new chip and Intel SDR?" As you noted, Intel has only announced "develop *plans* for SDR". So don't expect anything more than a polite "it's too early to comment" from QCOM. 5. re "does corDECT also require the use of a CDMA handset?" Not unless you're thinking a dual-mode handset. corDECT uses a Multi-Carrier-TDMA technology (MC-TDMA). tenet.res.in 8. re " ... is the royalty based on the manufacturers wholesale ASP of the PC Card or the notebook computer?" If the royalty were based on the entire computer, don't you think all CDMA modems would be sold separately? 12. re "Those carriers that adopted GSM1x would be isolated from lucrative roaming contracts with other GSM carriers" and "What was the Gartner analyst referring to?" Ask a more pointed question. For example, ask if Gartner was referring to a potential politically-based economic-repercussion for someone who chose to "break rank". Regards, Ron

To: Jim Mullens who wrote (32154)	2/9/2003 11:14:00 AM
From: jackmore	Respond to of 197809

Jim - question #10 is interesting: 10. A recent article stated that DoCoMo was subsidizing WCDMA handset manufactures development costs in return for a reduced wholesale handset price. Since Qualcomm’s royalty is based on the mfg wholesale ASP, could this practice reduce Qualcomm’s royalty fee from those manufactures? There may be a generic answer to this in the license for each manufacturer - like some clause that assures Q royalties are calculated on the non-subsidized price - but I don't recall it ever coming up. Since this could have implications well beyond DoCoMo, it would be nice to hear Q's response. Maybe IR would answer this one via email. Whereas in a public meeting they may soft-shoe it. Just a thought.

To: Jim Mullens who wrote (32154)	2/9/2003 12:53:58 PM
From: John Biddle	Read Replies (2) \| Respond to of 197809

Thanks for taking the time to come up with your list of questions and giving us the chance to comment. Here are mine to add to the list. 1 ... Will Qualcomm be pricing the MSM6300 in such a manner to allow it to be aggressively marketed as a replacement/ upgrade handset choice for Unicom and Vodafone and other carriers who operate both GSM and CDMA networks? As has been mentioned, Qualcomm has already answered this, saying that the difference will be nominal. Changing the question to ask how much the incremental cost of a MSM6300 over a GSM chip is, and how interested other GSM-only carriers might be, might be interesting. 5. Reliance (India) has been in the news quite a bit recently. In a number of articles they spoke of using corDECT technology in the rural areas of India. What is the relationship between corDECT and CDMA and does corDECT also require the use of a CDMA handset? If not, what proportion does corDECT represent of Reliance’s wireless business plans? CorDECT does not use CDMA. A slightly different set of related questions that might bear more fruit would be something along the lines of this: What proportion does corDECT represent of Reliance’s wireless business plans? Why does Reliance plan to continue the use of CorDECT in rural areas instead of 1x WLL?. Are you aware of any future plans for any 1X use in the rural areas? Related to this, my request for an additional question would be: What is the status of the $200 Million investment in Reliance. What are/were the significant issues around why this investment had such a rocky road? 10. A recent article stated that DoCoMo was subsidizing WCDMA handset manufactures development costs in return for a reduced wholesale handset price. Since Qualcomm’s royalty is based on the mfg wholesale ASP, could this practice reduce Qualcomm’s royalty fee from those manufactures? This is a very interesting question. I bet the answer will go much like this: If the "subsidies" by a carrier to a handset manufacturer are truly for R&D in order to lower the real costs of manufacture, then that is a strong positive for Qualcomm because low handset prices bring volume, and volume brings new services, which sets up the positive feedback loop for wireless nirvana. If the "subsidy" were nothing more than a way to hide the true cost of the phones, then you're right, Qualcomm royalties would be reduced in a fraudulent way, and there would be no compensating increase in the market. It will be relatively easy to determine which of these is happening. If the manufacturer is allowed to pass on the price reduction to all purchasers, then the subsidy was R&D, otherwise not.