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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 (5905)	2/12/2010 9:52:26 AM
From: waitwatchwander	1 Recommendation Read Replies (2) \| Respond to of 9129

Lets see, approximately 1B phones are sold each year and 1/2 are now 3g; 100M computers are sold and 1/5 are laptops. Let's assume 4% of the desktops and 25% of the laptops get a dongle. In 3 months the ASP mix would be something like 125M phones and 8M data only devices. Last qtr they reported 133M devices were sold so those numbers could be realistic. Now assuming phone ASPs came in at around $192 and dongles which includes Gobi came in at around $60, one gets an overall ASP of $184. All the numbers fit. Finally, let's assume the dongle market was artificially inflated due to filling of an inventory channel. Say 33% of the voume was abnormal and they should of sold only 5M data only devices. That gives us a normal phone to data device ratio of 25 to 1. Next qtr they tell us to expect 147M devices. Using the same price and ratio metrics (ie phone ASP-$192, device ASP-$60, phone/data ratio 25:1) the mixed ASP would be $187 which is 4% higher than Keitel's $179 estimate. Under the above scenario, to get to Keitel's number, phone and device ASPs would need to drop a couple bucks. If that was to be translated back upon MSM chipset costs (as some analysts and Paul are telling us) that would mean a further 10% decline. That might work for a year but seems extreme for a quarter. It sounds to me like the numbers are conservative although there is lots of room to move within the above scenarios. One thing is for sure, Keitel likely knows better than most and he sure didn't like the way the analysts on the call were choosing to spin his numbers. Everyone is trying to pick the bottom where device and chipset costs stablize. Much like a roller coaster, the excitement always crescendos going into the valley and the mind rarely reacts fast enough to anticipate the upturn of the car.