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To: Apollo who wrote (54413)	10/9/2003 3:57:35 PM
From: Eric L	Respond to of 54805

Qualcomm thoughts ... Apollo, << Overall, as long as one has a 2-12 year timeline, I think Qcom will be golden... Are there any other Qcom investors on this board, and what do you forsee? >> I too believe that as long as one has a (minimum) 2-12 year timeline QCOM will be golden and I bolded the '2' on purpose. Some patience is in order. Without elaborating on the rationale, I'm not of a mind that we'll see dramatic growth of Qualcomm's valuation in the next 12 months and I happen to think it is reasonably valued relative to Nasdaq today - much more reasonably valued than many of the 'recovery plays' in the wireless sector today. Candidly I have been somewhat disappointed in cdma2000 technology adoption by carriers, but all indicators are that we should see an initial meaningful commercial volume ramp for WCDMA handsets from numerous handset manufacturers at about this time next year, and as a consequence we should begin to see material high margin revenue impact commence for QTL over and above royalties for cdmaOne/cdma2000. Assuming that initial ramp does occur on the anticipated schedule I think we should see much more mature WCDMA handset product and related services a year later and the beginning of a hockey stick in QCT royalty revenue. The single caveat I attach to that is that in order for that hockey stick to start to form, carriers are going to have to loosen the infrastructure purse strings and get serious about buildout starting early 2005. The general state of the economy and capital availability will necessarily have an impact on this. Despite some inevitable erosion in chipset market share on the cdmaOne/CDMA2000 side, and despite the fact that I personally consider Qualcomm's target of 50% WCDMA chipset market share to be unrealistic, I do believe that QCT's's revenue growth from WCDMA chipsets will more than offset any erosion they suffer on the cdmaOne/CDMA2000 side. I consider Qualcomm to be a mini-blue chip and I think we are seeing real signs of maturity from the company and its management. I'm much more comfortable with the Qualcomm of today as opposed to the Qualcomm of 2 years ago. Financial reporting is much improved, the GAAP gap is diminishing, cash flow from operations is solid, and their cash hoard relative to top line revenue is enviable. They also happen to be the only wireless comm equipment manufacturer to demonstrate real top line growth this year and their net margins are the highest in the industry. As for management, I run a little hot and cold on Tony Thornley (on balance I give him positive marks), but I consider Bill Keitel and Dr. Sanjay Jha to be emerging as extremely solid corporate citizens. Overall its a pretty good management team directing the ship. I think it's a little early to worry about the capability of Paul to replace his dad, as I suspect Irwin is going to be with us for several more years. My money is where my mouth is on this one. Qualcomm today represents 19.5% of my tech equities investments. Those are quick thoughts. I'll expand a bit more on this after the fiscal year concludes and we have heard management's guidance for the upcoming fiscal. Best, - Eric -

To: Apollo who wrote (54413)	10/9/2003 4:17:51 PM
From: Mike Buckley	Respond to of 54805

Apollo, Are there any other Qcom investors on this board, and what do you forsee? I'm a QCOM holder though I encourage those that don't own shares to also contribute. The big problem I've always had with Qualcomm is that the potential market is so large that it's truly difficult to know what the growth can be. (Nice problem to have, but still an investor's problem.) I still hold to the fundamental observation that, at the very least, the potential market is a cell phone eventually owned by everyone on the planet at least 8 years old. (Well, except maybe me. :) In the 12-year time frame you suggested, it's really difficult to know how pervasive W-CDMA will be and the extent that its adoption will favor Qualcomm. There is also the question about how wireless transmission will be used and which segments are likely to be profitable enough to be the drivers that motivate Qualcomm's customers. How will data be used by consumers? How will it be used by company employees? How important will data transmitted between machines eventually become? And, of course, we can never forget that governments and politics also enter into the picture, sometimes to Qualcomm's benefit and sometimes not. Access to capital for Qualcomm's value chain is no less important which, at present, is limited among carriers. Toward the end of the twelve years you mention, it's possible that handheld devices can start to become the "center" of consumers' electronic devices. (I think that's more likely than the television ever becoming the center of all electronic devices in the home, mostly because it makes sense to me that the most important aspect of the central device is that it must be portable.) Just as some laptops today attach to a large monitor and keyboard and digital cameras connect directly with printers and televisions, I see handhelds of the future whether in the form of a cell phone or a more comprehensive PDA attaching to desktop computers for everyday use by everyone in the family and business. Beyond those dozen years, there are certain obstacles that will need to be overcome. Unfolding screens or holigraphic images will need to be developed to solve the inherent problem of screen size. Voice-recognition software or other solutions will be needed to solve the problem relating to the difficulty of using such small keyboards. During such long time frames, the stock will inevitably be undervalued and overvalued at times. Over the really long haul, which is what my time frame has always been, I think the company's prospects remain terrific for considerably outperforming the market. Such a long-term mentality is definitely not in vogue these days, but that's nothing new. --Mike Buckley

To: Apollo who wrote (54413)	10/10/2003 4:15:07 PM
From: Jim Mullens	Read Replies (2) \| Respond to of 54805

Apollo,Mike, et all, “The big problem I've always had with Qualcomm is that the potential market is so large that it's truly difficult to know what the growth can be. (Nice problem to have, but still an investor's problem.)” The “problem”, “what the growth can be”, and when will it be transferred to the stock price? The simplistic metric I’ve used for sometime now is the current number of CDMA subscribers vs the addressable wireless market when 3G dominates the market. Early on, it was 100M growing to 1B (10X), now its closer to 170M growing to 2B to 2.5B (15X) as most consultants estimate the number of wireless subs to be over 2B by the end of 2007. A recent Seimens official was recently quoted saying- “...all European handsets will be 3G capable within 7 years (2010).. And, the Chinese MII was recently quoted saying- “ “By then (2007), an estimated 15 per cent of the mainland's mobile-phone users would be using 3G (55M of 370M), rising to 80 per cent by 2010 when the pool reaches 600 million.. Qualcomm will receive approximately 5% royalty on most all handsets sold world wide within 7 years, and will (IMO) continue to have a large share of the chipset business (75-85% of CDMA2000, 50% +/- of WCDMA. CDMA modules with imbedded Qualcomm chipsets are now starting to be fabricated by Kyocera and others for M2M applications (medical devices, measuring/sensing devices, vending machines, asset (homeland security) tracking, child/ elder protection/tracking etc, etc) which could even be a larger market than the subscriber (human) market. New revenue sources in addition to handset / module sales are also on the horizon including BREW, Qchat, Qconnect, AgpsOne modules, etc. Just how big Qualcomm’s market will be is difficult to quantify at this time. The second question as to when that phenomenal growth will be recognized by the market forces and reflected in the QCOM share price is another question as the “analysts” are IMO currently significantly underestimating Qualcomm’s growth with a consensus 3-5 year growth rate of only 15%. Perhaps that catalyst will be when China announces their technology choices for 3G which should be within the next several months. It would appear that Unicom will choose CDMA2000 with Mobile and the other two land line still up in the air. The longer it takes for WCDMA to stabilize and show economic/ technical viability, the more the scales tip in favor of CDMA2000. Qualcomm of course wins in either case, but the magnitude would be much larger in CDMA2000 prevailed in a couple of the other Chinese carriers. The Chinese 3G decision can not be deferred much longer as I would imagine their networks have to be built, tested, and in proven operational status at least a year before they host the Olympics in 2008. Some of the other catalysts noted sometime back are listed as follows ( some have actually occurred)- 1. Nokia announces they will use Qualcomm chipsets 2. AT&T (or other) U.S. carrier switches to CDMA 3. VOD (or other European carrier) switched to CDMA 4. Asian GSM carrier switches to CDMA 5. VOD trials GSM1x 6. Nextel to use CDMA2000 7. PCS or VZN to use 1x EV-DO 8. Supreme Court rules for Nextwave 9. PCS or VZN 1X network gain grossovers from GSM carriers 10. KDDI 1x Network gains crossovers 11. China Unicom selling only MSM6300 chipset phones for their GSM network 12. VOD selling only MSM6300 chipset phones for their networks 13. Dell, HP- Compaq, etc use CDMA2000 exclusively in their laptops 14. China land line carriers choose CDMA2000 for 3G.