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

To: quartersawyer who wrote (80966)	10/13/2008 2:29:37 PM
From: David E. Taylor	Respond to of 197347

Extract from Part 5 of that long series of posts I made: I should note here that the MSM projection for Q4 by QCOM is almost flat with Q2 (85 million) and Q3 (86 million). I have no reason to doubt QCOM’s 84-87 million estimate, because by 7/24/08 they likely had a reasonable handle on calendar Q3 orders for MSMs. Since MSM shipments are a leading indicator by 15 to 20 weeks for CDMA device sales to end users (assuming QCOM is not losing market share), we could take this slowdown in MSM shipments as an potential indicator of slowing CDMA device sales. This conclusion would be consistent with present market fears of a global slowdown in cell phone sales. However, I also note that there was a significant step up in MSM shipments from 2007 calendar Q3 to Q4 (FY2007 Q4 to FY2008 Q1), from 68 to 79 million, well above any historical Q/Q increase. This may therefore have been an anomaly, and the subsequent 3 quarter slowdown in MSM shipments may just reflect an excess channel inventory work-off. QCOM did note in its 11/14/07 FY 2008 Q1 updated guidance that MSM channel inventory was at the “high end of normal 15-20 weeks”. We’ll have to wait and see what comes out on 11/5/08. So, QCOM does have a target range for channel inventory of MSM's, it appears that there was excess channel inventory this time last year, and that may explain the more or less flat MSM shipments for the 1st three Q's of FY2008. They almost certainly adjust shipments in anticipation of handset manufacturer demand, who in turn adjust production rates to match carrier and consumer POS demand. Seasonal, yes, hard number, no. David