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Technology Stocks : The New QUALCOMM - Coming Into Buy Range -- Ignore unavailable to you. Want to Upgrade?

To: Jim Mullens who wrote (5162)	5/7/2009 9:17:27 PM
From: slacker711	Read Replies (1) \| Respond to of 9129

b) at some point the law of diminishing returns kicks in, making it uneconomical to lower ASP any further. This is only sort of true. We are unlikely to go below $10 handsets but those ultra low-end handsets isnt where we are going to see the price pressures in WCDMA. The real impact is going to be from $150 WCDMA handsets with 1.3 megapixel cameras and MP3 players moving down to the $75 range. Moore's law is inexorable and Qualcomm no longer has the conversion of high-end GSM handsets to WCDMA to balance out that trend. + With TXN out of the picture, NOK desiring 2 – 3 baseband suppliers, BRCM still touting its prowess and without even a commercial EDGE product after some 5 years effort, other legacy suppliers struggling--- who you see NOK giving the bulk of their WDCMA baseband business to and why? I expect that Nokia will work heavily with both STM/Ericsson and Broadcom. There are some strategic reasons to avoid STM/Ericsson but those are fading as Sony Ericsson loses share. I also believe that the drawbacks for Nokia of working with STM/Ericsson are smaller than allowing Qualcomm to gain share substantially above 50%. If that happened, Q would have quite a bit of power over their customers (ala Intel). As I said in the previous post, Nokia will do everything they can to avoid that kind of situation. They dont want to be the next Dell. As for Broadcom, let's see how the ramp goes this quarter with Samsung. The fact that they have such high profile customers speaks well to their designs, but ultimately it will come down to execution. I fully expect though that more baseband competitors will spring up out of China/Taiwan. The commoditization of the WCDMA baseband market means that more and more companies will be able to compete on price. + With the ascendancy of other suppliers in 3GSM/WCDMA (Asians, Apple, GOOG, etc), NOK’s 40% total market share would appear to be further threatened as WCDMA sales ramp. Thus, the Samsung’s / LG’s, etc with well established partnerships with QCOM (and giving virtually 99% CDMA2000 share to QCOM) should be gaining WCDMA share with attendant QCOM chipset share gains. How long have you been predicting that this would happen? Maybe it will finally occur, but each time Nokia has seemed set to lose drastic share in the past, they have responded. As with color screens and flip phones, they were very late to the market with touchscreens, but they are finally ramping up. We'll know much better by the end of the year whether Nokia really has committed a misstep for which they will lose permanent market share. It is too soon to tell right now. I will say though that a drastic share loss by Nokia would be the best thing for Qualcomm. The increased royalties alone would be worth quite a bit. Slacker