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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 (93396)	7/21/2010 6:38:22 PM
From: slacker711	6 Recommendations Read Replies (1) \| Respond to of 196650

Good call...except for the answers on QTL margins. I'll have to look at the transcript but Keitel seemed to concentrate on the fact that revenues were down based on seasonality. That is a BS explanation since costs were actually up on a straight line basis from $153m to $174m. I took a quick look back at the numbers from '07 and '08 (at the height of the legal wars) and these numbers are substantially higher than they were during those years. Patent applications doesnt explain it. They have either shifted quite a few costs from QCT to QTL or they are paying somebody quite a bit of money. Slacker

To: slacker711 who wrote (93396)	7/21/2010 7:18:16 PM
From: waitwatchwander	2 Recommendations Read Replies (2) \| Respond to of 196650

Im not surprised by sliding QTL margins. I suspect, they have had to put in place extensive audit infrastructure to keep everyone honest. Five years ago they just trusted everyone. They now know better. Another cost on the QTL front is the offsetting amortization of the Nokia and Samsung 4G patents over their fair life. $3.5B (Nokia $2.3B, Samsung $1.2 ???) over 15 years would generate a quarterly straight line QTL expense of ~$60M. It's probable not a straight line amortization. The only R&D costs that should be accruing to QTL would be the costs of patent filing. I always thought "corporate" R&D was being expensed quarterly but it's unclear to me which division is getting charged. Most R&D (Snapdragon, Mirasol, 4G chipsets) should be going against QCT. The only thing in the area of QLT would be items like ezone, new 4G standards, femtocell innovations, and wireless medicine (PANs). You are right that shouldn't be much. I've yet to review the numbers nor listen to the call but a 79.5% QTL margins would be a drop of 3.5%. That is roughly a $35M expense. A good chunk of that could be amortization of the "streamer" patent acquisition costs. Sometime in the near future, I hope an analyst asks them how their promise to monetize those costs is coming along, especially the GSM patents.