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

To: dougjn who wrote (8144)	2/8/1998 9:59:00 AM
From: limtex	Read Replies (1) \| Respond to of 152472

doug - As postive about the Q as most of us are here I think you do have a point about the market although it can surprise all of us tomorrow morning - either way!! I have however been thinking about your response to Bharat which was a v.clear summary of the CC. These are what worry me: 1. OK they didn't know some of the bad news about Korea 17 days ago but didn't they know some of it, one little piece of what turns out to be several pieces of v.v. bad news from Korea? I mean did the Koreans all phone San Diego onThursday and say sorry boys were cancelling as of now? Was it a conferrence call with all the koreans on one end of the phone? 2. The $500 handset issue. Only I think on Thursday the thread referred us to an article in Red Herrning (4th Feb) which I thought was one of the most bullish I have ever read and I posted so after I read it. However on re-reading it ( and I recommend ALL TO READ THE FULL ARTICLE ). The writer is Peter D Henig and here is an extract:- { Analysts across the street were closely watching Qualcomm's handset margins and suddenly felt the that the fallout from Aisa would have a pretty severe impact on Qualcomm's ability to meet growth expectation for it's Q-phone. During the year that the company had been in the market, handsets had been driving revenue growth, with the company reporting 16% growth in September and analysts had been expecting 20% for December. According to JP Morgan analyst Greg Geiling "...handset margins were the big reason why the strock was dumped." Although Qualcomm tends to play hide the ball with its handset numbers, it has bascially promised Wall Street it will meet the industry average of 28-30 percent by the end of 1998 - a tough challenge especially during the dark days of Asia's financial collapse.} My second question therefore is what happened or who sasid what that changed the analysts view that handset margins were no longer a concern. I mean they must have changed their view because if the margins were a big issue and the analysts became more bullish ( which they did) something must have changed their mind. Handset margins in the US don't change overnight. So... When did the management get an idea that things weren't going so well for handsets and margins? 3. Why did both of these issues ( and whatver else analysts can be expected to derive from the warnings on the CC) come to be delivered at the same time since by the sound of it both are deserving of notification to the market as soon as possible? For the avoidance of doubt I happen to be a supporter of the Q and I remain so as my other posts have indicated. ( I have never shorted any stock.) BUT I think my questions are reasonalbe in the circumstances if only to allay a nagging fear which came to me after reading your post to Bharat that there might be some more in store for us from this management if they didn't have any idea that what they just warned us about was in process. AND of course you are right that a drop of to $1.40 from $2. anything is massive for a company like this in a market like this. In fact given the proximity of the warning to the euphoria over the results and the superbowl it is quite astonishing.