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

To: slacker711 who wrote (62734)	4/17/2007 12:36:56 PM
From: waitwatchwander	Read Replies (1) \| Respond to of 197036

---> stronger than expected MSM shipments and the fact that Japan and Korea both had very good March quarter handset shipments bodes well for guidance Offsetting those +ve's is that the ASP of both chipsets and handsets is most likely heading lower. You can't have a cheap 3g-for-all handsets and cheaper cdma handsets in India without lower chipset and royalty revenues in that part of their product mix. Also, I'd expect handsets coming out of China (ZTE & Huawei) being lower priced than those of the Koreans (Samsung & LG). As Qualcomm executes on its plan to empower its partners, one has to expect them to increase their market share, putting further pressures on both handset and chipset ASPs. Fundamentals are changing in numerous dimensions. We are now transcending into a period where tracking the trends in the factors driving product mix may be just as important as tracking handset ASPs and market share. It is a pity Qualcomm doesn't provide the ASP of their MSMs each quarter. I have constructed a proxy based on Equipment Services Revenue / MSM Shipments (rolling 4 quarter weighted average). It indicates MSM ASP's have started to decline. Given that I expect my chosen revenue category to include software and services revenue which I expect to be increasing, the actual average MSM price is probably declining faster than that indicated by this fuzzy measure. Proxy of MSM ASP Trend Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Equip/Service Revenue 954 978 849 882 1,035 1,150 1,122 1,240 1,264 1,342 MSM Shipments 39 39 37 36 40 47 49 55 56 59 60 % Increase Q/Q 11.4% 0.0% -5.1% -2.7% 11.1% 17.5% 4.3% 12.2% 1.8% 5.4% 1.7% MSM ASP Indicator 25.12 25.10 24.46 24.26 24.63 24.48 24.35 23.81 23.07 22.68 Then, there is the impact of CSM channel cards within equipment revenue, the intricate quarterly lag between MSM shipments and handset shipments and the issue of where Qualcomm's MSM shipment capacity plateaus. Available fab capacity, utilization and book to bill are other factors than Qualcomm holds close to its chest. As we move forward, those may become just as important as MSM shipments and handsets sales. Caveat: I have not delved deeply into what's contained within the Equipment/Service Revenue category. That may well be a considerable weakness in my methods.