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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: DTA who wrote (8133)	2/7/1998 3:39:00 PM
From: arun gera	Read Replies (2) \| Respond to of 152472

Qualcomm's gross margins in the next quarter are likely to be about 18 percent. That is definitely a low margin business. Can you name companies making much good net margin with that low gross margins. I can think of SMOD as one company that made money with margins as low as that, but they hardly had any R&D costs. Lucent sold its phone business to Phillips (or was it Siemens?). Does anybody know what was the price of that transaction. What was the valuation of the cellphone division in terms of market cap/sales? Maybe be worthwhile comparing to Audiovox. In other valuation the royalty business of Qualcomm is worth 1.2 to 1.5 billion, by itself. $150 million annually with a steep growth rate is definitely worth that much. The Omnitracs business should be worth about $300-400 million at least with recurring revenue of about $500 per truck and a growth rate of 15 percent(look at valuations of much less successful AMSC, Highwaymaster and Geotek businesses). And the infrastructure business should also be worth about $300 million. The Eudora business should be worth a least $200 million (Look at how much Hotmail sold for, $300 to 400 million). The valuation without the handset business is about $2.2 billion. Even if we take the lowest valuations - say 0.3 time sales for the hand-set phone business, that amounts to about $1 billion. Total inherent valuation for QCOM - About $3.2 billion. What does that convert to stock price? I just checked - $3.2 billion translates to about $47 stock price. QCOM is somewhat of a value stock below that price. This is without any speculation. Arun

To: DTA who wrote (8133)	2/7/1998 6:21:00 PM
From: JMD	Read Replies (1) \| Respond to of 152472

Duane, welcome to the QCOM thread. Unfortunately, I agree with everything you said so can't give you my normal ration of sarcasm by way of initiating you. <g> Despite a little (well okay alot) insanity, chuckj, a dog currently incarcerated, a dipsomaniac from New Zealand, an ex-surfer who thinks he's a stand-up comedian, several engineers who write in Russian Orthodox, the most cynical size challenged Asian this side of Hong Kong, and assorted other characters, it's a perfectly normal group. Honest. Mike Doyle

To: DTA who wrote (8133)	2/7/1998 7:32:00 PM
From: dougjn	Read Replies (2) \| Respond to of 152472

Actually, I think a $500 phone (or thereabouts) ought to be a perfectly saleable item. Not of course to a huge mass market, but to a significantly sized one. However, one needs a couple of things. Brand fairly widely identified with quality, and some clear bragging rights for the model...smaller, more features, etc. The market is status consious Yuppies and arrived Yuppies. You know, successful lawyers, investment bankers, execs, specialist doctors, and the like trying to impress their breatherin with the latest and greatest. Hight end laptop computers carry some nerdy connotations in some circles, at least among the middle aged boomer set. Cell phones, the smaller and more wiz bang the better, never. Now of course tech spec savy engineers, academics, software writers, young techies, older folks, etc., etc. are an entirely different market. And no doubt a more rational one. All in my opinion, natch. (What Q needs to do is better establish their brand. The point of spending the money is to have the bragging rights; its a fashion statement. $500 will never compete with $150 on features per se.) Doug