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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 (68081)	8/21/2007 2:40:41 PM
From: sag	Read Replies (1) \| Respond to of 197450

Can I safely say that none of these numbers fall into the "very minor" category? You can say anything you like. Using an effective tax rate of 20% and a royalty rate of 4.5%,my ballpark, Nokia's WCDMA revenues would be roughly 20% of the total revenue figure that you used of 11.5B

To: slacker711 who wrote (68081)	8/21/2007 5:38:18 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 197450

Can I safely say that none of these numbers fall into the "very minor" category? Slacker, if your assumptions on royalty rate of about 3.5% are correct, then I agree that Nokia WCDMA revenues are significant. However, if the royalty rate is closer to 5%, which is consistent with what QCOM receives from other licensees, then Nokia's WCDMA revenues (so far) would be considerably lower than 32.5% for the most recent quarter, and obviously lower than that if you combine, say, the last 12 months. Let's focus on the impact of future WCDMA handset sales and the strong growth expected, no matter who makes the handsets. This is one of the assumptions behind the future earnings projections in QUALCOMM's guidance for fourth fiscal quarter and FY 2008. To avoid ceding market share to a firm like Samsung, Nokia has to think long and hard on whether it avoids using QCOM IPR or uses it and pays for it. Art

To: slacker711 who wrote (68081)	8/21/2007 8:23:41 PM
From: Eric L	Read Replies (2) \| Respond to of 197450

"Very Minor," Minor, or Significant? Slacker (Slaker), Art wrote ... And of course, we all know that WCDMA handsets have until now been a very minor part of the total revenues for Nokia. You wrote ... Before I go digging through some numbers, would you mind telling me what your definition of "very minor" is? You backed into this number and commented... At that rate, Nokia's WCDMA revenues would be $3.745 billion. Nokia's total handset revenue in the 2nd quarter $11.538 billion (using 1.34 Euros to the dollar). ... That means that WCDMA handset revenues were 32.5% of total handset revenues. I would also add that Nokia has stated that WCDMA handsets are more profitable than GSM....so an even higher portion of their total profits are coming from WCDMA units. Nokia's total Q2 handset revenue with currency converted at 6/20/07 Interbank rates was actually $12.315 Billion USD (€9.149 Bil). My quick back of napkin using a different approach than yours puts their WCDMA handset revenue at ~$3.981 Billion or 33% of their total handset revenue sales. Their overall pre-tax operating margin for all handsets was 20.9% or $2.574 Billion USD, and of course was slightly higher for WCDMA units than GSM or CDMA units. You asked, Art ... Can I safely say that none of these numbers fall into the "very minor" category? They don't for me. Nokia's ~$3.981 Billion of WCDMA handset sales revenue is 70% greater than QUALCOMM's FQ3/CQ2 total revenue sales of $2.33 Billion from all sources. LG and Samsung are QUALCOMM's two largest customers and Samsung is the 2nd largest handset manufacturer globally. Their total handset revenue sales (all technologies) were $4.273 Billion (Samsung) and $2.926 Billion (LG). Samsung's operating margins were 8.0%, and LG's were 11.6%, unusually high for them but their WCDMA and GSM sales were big drivers of that. Art stated to you ... Slacker, if your assumptions on royalty rate of about 3.5% are correct, then I agree that Nokia WCDMA revenues are significant. Factoring what Nokia says on the subject, and what QUALCOMM says, I think your 3.5% might be a tad high. I now use 3.25% but who really knows If Nokia and QUALCOMM can't figure it out? Best, - Eric -

To: slacker711 who wrote (68081)	12/22/2007 4:45:30 AM
From: Maurice Winn	Respond to of 197450

So now or very soon, half of Nokia's profits come from W-CDMA technologies. And that will continue to grow. Plus they never did give up on CDMA2000 completely though they promised to. So there is some more profit based on QUALCOMM. If they don't have a licence to sell QUALCOMM technology, they will be back in the gumboot business which would NOT be good for NOK dividends. They would lose market share hand over fist. Without W-CDMA, their GSM/GPRS/EDGE sales would take a hit too because their whole marketing programmes would shrink, dwindle and fizzle. Samsung and the swarms of other QUALCOMM licensees would jump for joy and fill the gap in days if not hours. If QUALCOMM was to go nuclear, it seems that Nokia would be the bigger loser. It would be worth it to see them take the hit. I don't think Nokia will be so bloody-minded, especially when it'll be their own blood they spill. They'll renew; unless they have blundered and unilaterally abrogated the agreement and they are now in breach of USA patent law and should be punished, in which case they'll have to pay the penalties and try to agree a new licence at more reasonable rates, such as the rates that China agreed to for exports = 7% or so, which is a bargain compared with GSM's 16% for a pathetic number of bits per second per hertz, W-CDMA's 12%, Nokia's ideas on licenses for 1, 3, half a dozen patents, and Broadcom's $6 a device for a few poxy little obvious patents. Nokia is in a bad position. Mqurice