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

To: JeffreyHF who wrote (49176)	12/12/2005 10:43:26 AM
From: Eric L	Respond to of 197443

Sea Changes? Jeffrey, << Paul Sagawa is Nokia`s greatest analyst booster. Historically, he has been less than constructive on Qualcomm. If he now has positive things to say, it does represent a sea change. >> Historically, Paul Sagawa has been very QUALCOMM positive as well as being very Ericsson positive as their management changes and reorg bore fruit, and since mid-2004 increasingly Nokia positive after evaluating very carefully what they were doing to recover from the major share hit of H1 2004 and their subsequent margin decline (and others even more so, in handsets). I'm not sure if he's warmed to Motorola yet. Back in early 2003, when wireless telecoms stocks were still deep in the dumpster presenting some excellent buying opportunities, Paul was one of the first tenured analysts covering comms equipment to turn sector positive and positive on 3G. I have not yet seen the 11 page December QUALCOMM report referred to by James Shepherd on the QUALCOMM TMF board, but please note that Paul continued his Outperform rating on QUALCOMM which was already in place. That is not a sea change, and he did not turn QUALCOMM positive last week, by any means. Best, - Eric -

To: JeffreyHF who wrote (49176)	12/15/2005 11:33:15 AM
From: Jim Mullens	Respond to of 197443

Jeffrey, Re; Sagawa and “Historically, he has been less than constructive on Qualcomm. If he now has positive things to say, it does represent a sea change.” Agreed, a “sea change” My recollection over the years is that Paul has been quoted in articles favoring the NOK/ GSM crowd and without much if anything positive to say about the Q / CDMA. The “sea change” occurred a few weeks back (Nov 4, 2005) when Paul initiated QCOM coverage with an Outperform rating and a $52 target (ultra conservative DCF based “fair value”). He did so almost entirely based on the strength of the QTL segment, not giving much credence to QCT. “We believe Qualcomm will benefit from a significant expansion of its addressable market, driven by a faster and more complete than expected shift to 3G WCDMA technology”.....”as CDMA and WCDMA become dominant technology standards” “... better that 27% sales and profit growth (from QTL)...through the end of the decade...(with little effect expected from EC complaint) I posted this about a month ago>>>> In SAGAWA’s QCOM report he’s pessimistic on the Q ability to garner much WCDMA chipset market share on the grounds that the cumulative WCDMA royalty rates will be over 25%, with 12 -14 % of the 25% for the GSM piece. He believes this high rate will be a barrier to entry to LG, Samsung, and BenQ (Seimens) since he states they are without strong GSM IPR for cross-license bartering. Seems to me that’s faulty logic, given>> 1. BenQ now includes Siemens, and they along with Samsung and LG have been big sellers of GSM devices already. 2. The Q may have pass-tru rights with NOK/ERICY/MOT/TXN, etc. 3. The Q just launched a shot over the bow WRT their own GSM/GPRS/EDGE IPR that just “MAY” be used to level the playing field. 4. SAGAWA did not mention HSDPA and the Q’s apparent significant lead in this significant market. 5. Further, the Q’s highly integrated model should further benefit the Q’s competitive advantage>> lowering BOM, board area, power consumption, and time to market (greatly simplifying the handset makers tasks). Dr. Jha repeatedly stressed the board space savings (and the successful MOT thin phone designs) which the Q’s chips will produce. Although I’ve not seen any price comparisons of the chipset costs between NOK + TI and EMP + TI vs the Q’s MSMs/ chipset package, I have to think that the Q’s integrated solution is less costly especially when considering all the savings it provides to the handset mfg (less external components, procurement/ design/ testing costs). Again, SAGAWA initiates the Q with a buy, with a + $52 target based on very conservative GAAP DCF “fair value” estimates + further states the Q should beat the $1.45 consensus FY06 estimates by 18 cents + And, most all of this is from QTL, with little growth seen in QCT or the newer initiatives.