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

To: peterk who wrote (61826)	4/2/2007 1:03:55 PM
From: Eric L	Read Replies (1) \| Respond to of 197253

Boxmakers v. Innovators Peter, << The Nokia's of the world will been given the task of putting the pieces of the phone together- not very glamorous or revenue generating. >> Let me know when that happens please. Some Dellification of the industry may be occurring (has been occurring) but so has consolidation around an increasingly smaller base, and Nokia isn't a boxmaker and the boxmakers in mobile wireless are faring very poorly. With the single exception of Samsung QUALCOMM's largest customers are not faring well. Take a look at their operating margins for last year. LG was barely profitable. Moto will be fortunate to finish this year with positive operating margins. Sanyo, Kyocera, Pantech? All negative margins last year. In the Nokia case, the two divisions (Mobile Phones and Multimedia) that design manufacture, and distribute, the majority of their mobile phones ONLY generated €32,646 Billion ($42.9 Billion USD) revenue in CY 2006 and ONLY generated €5,419 Billion ($7.1 Billion USD) pre-tax operating profit on that revenue. I assure you, that all those numbers will grow this year just as they did last, and if they continue to execute as well in the following year as they have in the last two the same will be true. As one of many companies that doesn't see the need to have QUALCOMM be the aggregator of R&D for the wireless industry, in 2006 Nokia invested €3,897 Billion ($5.1 Billion USD) in R&D. That compares to the FY 2006 QUALCOMM R&D spend of $1.54 Billion USD. It's an R&D intensive industry and slackers will see the value add pass to R&D aggregators. Nokia isn't a slacker. Neither is Ericsson, and those two are the market leaders in the respective sectors of communications equipment design, manufacture, and distribution, where they hold the lead for revenue generation and profitability. Best, - Eric -