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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 (35172)	6/1/2003 6:24:52 PM
From: propitious7	Read Replies (1) \| Respond to of 196545

jim: further shreds from Analyst Mtg let me answer yr specific questions and ventilate on your more general queries, FWIW. Para numbers correspond to your questions. 1. The meeting was haeld in same room in Essex House as last year and practically every seat was taken; I do not know if late applicants were turned away. That's about 250-300 people I guess. Not all are "analysts", of course. There are many money managers, private investment advisers and some larger investors. 2. The audience was very attentive. You can tell that from the pick-up on irony or, what passes for in these meetings which have a low standard, humor. As I wrote earlier, the Q&A was both broader in scope and deeper in insight than the hackneyed drivel from Qtr ConfCalls (where questions are restricted to the analyst community). 6. There was no bar in the conference, hosted or otherwise. Bag lunches were served with soda and a buffet was continually available with coffee, juice and water. I wd not recognize Ed Snyder. 5. TT did ask analyst community to look at longer view. I don't remember context right now but I think that he or others mentioned perspective in context of SARS (for Unicom it is just a question of timing as to whether sales may be blipped by the SARS crisis; nor will it affect decisions of the ChinaTel or ChinaNet or the MII. The results may be deferred by a uarter but results will not be different). In context of BREW the same theme was sounded; making profit on BREW not being the near term goal). And references to wCDMA urged listeners to watch the growth curve over a period of years not quarters. 4. The issue of "nothing new there" pushes into the sphere of opinion. On the facts, I agree that the multiple annuncements from Q are not new. The product markets are evolving but in a reasonably predictable way; the geo markets are moving along but at the two steps fwd- one step back pace that characterizes progress in a market where govt decisions have a decisive effect of adoption of technology. As an investor, however, one of Q's great appeals is that the game is largely disclosed for a bunch of years. Not the rate of growth but the direction have been defined with sufficient clarity that I can feeel comfortable in taking the risk of investment. In a CSCO or TXN, the number of products, the complexity of growth, development, change make the game far more unpredictable. Of course there are risks; Q could be sandbagged by a sharp change of govt policy in China or India;. But I like the alignment of Q's interest with the public and national interest of those governments. Both want fast track growth of telecom penetration and an opportunity for participation by local companies in the telecom industry and telecom equipment industry. And both these major nations have a capacity to evaluate the technical characteristics of CDMA vs GSM and have reason to make their standard decisions free from the pressure and urging of (to them) foreign carriers and euipment manufacturers. Not to go too far on this point, for I merely intend to illustrate that the evolution of wireless telecom in the next few years will take place, in my view, in the confluence of technical standards, government interests/policies and compeittive suppliers which are not likely to be radically changed. Many disagree about the results which will follow from this confluence but I like the cards held by Q in the game and am willing to keep my chips on the table to see how it plays out. Stock Price and Company Response. Again my opinion, but I do not think Q is going to get in a PR stakesrace to influence or interdict opinions expressed by analysts , competitors or countries in order to juice up its stock price. If Q were interested in acquisitions, its stock price as currency to bid would be of immediate and continuing interest. If Q thought that the one-two year future was shaky, they might try to hype the stock to protect stock options of executives. But if Q truly believes, and don't I recall your sign-off slogan correctly, "The Best is Yet to Come", then let the results speak for themselves. It will not matter to shareholders or executives that the stock price is in the 30's in 2003 if the growth rate of CDMA is in the 30's for the next few years. As I previously indicated, Q is very deliberately not bashing competitors or other representatives of GSM community or others with interests adverse to CDMA. It seems clear to me that Q believes that such bashing, while satisfying, is not productive for business. I suspect that Q would say that in the early 90's and mid 90's, their shrill and combative tone in the advance of CDMA was necessary. They had to win some adoption decisions in countries besides Korea. Similiarly, I suspect in a private moment Q would acknowledge that their claims for CDMA performance were too high and too early in those years. But now the company credo seems to keep the promises short enough in scope and time that they can be fulfilled and to let the results speak for them. One comment I omitted from my earlier report was on Samsung as an own-producer of chipsets. We all remember a year ago when Don Schrock scored the point, which must have given all true-believers gratification, that Samsung announces own-production every year at the time of negotiating chipset pricing with Q. And we loved it when Rich Sulpizio hammered the other side". That's not the tone they want now. Instead, Sanjay Jha says (as he did in the Meeting), Samsung is one of the great chipmakers in the world. If they want to make CDMA chips they can; the question is whether this is a profit-maximizing use of their resources. Samsung has designed handsets using every single one of our chipsets . They benefit as much as any company in the world from the Q investment in R&D and chip development of the whole family. We have a close relation (Q was named Supplier of Year by Samsung). So we believe we will continue to work with Samsung and to be a supplier to them, hopefully of most of their chips. This attitude won't juice the stock price. But if Q has confidence that Samsung will continue to source most of its chips from Q and (another statement by SJ) that Samsung is not likely to source chips from a joint venture of TXN-STM-NOK, then why not just let these results play out. As you know Q is very well advised on the market and on its stock price. Peter Sacerdote of GS is on the Board and Lehman is their other principal banker (tho neither earns much from investment banking fees in a company which abjures M&A and has little reason to issue debt or stock). Do you rememeber when Q was admitted to the S&P 500? Under advice from GS, Q (first time I have seen this) did a special issuance of new stock to privately place shares with the index funds which had to buy Q stock when it came in the 500. So instead of a temporary price jump from this demand for a bunch of million shares (the profits from which would go to the short swing traders who jump in in anticipation of the S&P entry and jump out after a several point run-up), Q kept the price stable and raised at zero commission a bunch of bucks for their Treasury. That's smart; that's long-term stock price management. Q is well advised. Sorry to all that my epistolary habit is to spew too many words on too few posts. It results from many years of creating work product by dictating to a secretary which encourages verbosity. propitious