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

To: matherandlowell who wrote (91121)	4/23/2010 8:53:53 PM
From: ggamer	2 Recommendations Respond to of 197218

Wow fantastic post We needed someone to look at the situation from 35000 feet. It is interesting that you did mention much more than royalties. I believe millions are waisted every day on pet projects. I say spin off the darn projects and let them find a niche in some market. We all like and believe in qcom and most have been watching and waiting with much frustration. I have been waiting patiently for more than a decade. I tried timing the darn stock and I sold my shares around 42 and bought it back in 50s and high 40s because I did not want to miss the train after nokia settlement. So while I believe in this stock I am not sure all the managers in the company are really watching their expenses as they should and are they watching return on investments? While economy is bad and wife out work, I got pretty emotional when I heard another unemotional conf call and stock going down. ok tired punchinbg at blackberry while buzzed. Sorry for grammer and spelling errors

To: matherandlowell who wrote (91121)	4/24/2010 12:30:54 AM
From: slacker711	4 Recommendations Respond to of 197218

A metric which no one can avoid is the one referenced earlier from the Morgan Stanley presentation. 3G users are growing rather quickly: 373 million in 2007, 430 in 2008, 688 in 2009, 1055 projected this year, and 1503 million projected for 2011. True, I'm not an engineer, but those numbers don't sound like 10% growth to me. Just so we are on the same page, I am looking for the best proxy for Qualcomm's future revenue growth. Let me put it this way, if subscribers were the correct way of forecasting Qualcomm's revenue growth, why in the world is revenue only projected to grow 6% this year? The numbers in your post show that 3G subs will grow by 53.3% this year. When you have a disconnect that big, there is clearly something wrong with the proxy. If Qualcomm was generating a $1 per month per subscriber, then clearly the sub number would work. However, we both know that Q's business model depends on CDMA device sales....or more accurately, CDMA device revenue. For a very long time, we could use units as a proxy for that market, but the falling ASP's mean that we need to shift to looking at the overall device revenue. It is a bit tough to get at the number for 2010 since Q's projections for units cover the calendar year and the ASP projection is for the fiscal year. However, you can get a rough estimate using the FY ASP decline and applying it the calendar year. That gives us an overall growth rate for the CDMA market of 10.7%. This is in the so-called sweet spot for 3G growth and after a horrendous year in which many people likely held off on an upgrading their handset. The problem is that the law of large numbers has caught up to Qualcomm. You are right that 3G has a long way to go in terms of subscribers and even when looking at units, it is still only a little over half of the global market. However, the number is substantially higher when looking at revenues....in the neighborhood of 70%. The transition to CDMA has been happening for years when looking at it from a revenue standpoint....and that is the number that matters when we are trying to forecast Q's future revenues. Slacker