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

To: Asterisk who wrote (8173)	2/8/1998 3:54:00 AM
From: bdog	Read Replies (2) \| Respond to of 152472

Good point; I think you're right. Ditto Gregg Powers on two helpful and thought provoking posts. In my disappointment I was perhaps getting a tad paranoid. Clarify one thing if you (or anyone) can. On the cc did they suggest earnings would be flat relative to Q2 97 or relative to the most recent quarter, i.e., Q1 98? (I believe someone suggested the former and that is not only scary but hard to believe scary.)

To: Asterisk who wrote (8173)	2/8/1998 10:28:00 AM
From: JMD	Read Replies (3) \| Respond to of 152472

Wow Michael, that was one great post! As long as I have listened to QCOM conference/earnings calls, I have always come away with the same impression: great engineers, lousy spin doctors. Remember this summer when the then cancer story du jour was not Korea but rather production line change over and ramp up? Could they learn to make phones, the right phones, enough phones, cheap enough phones, make them by Christmas, etc? The analysts just kept hammering away and Jacobs said: we are at this point on (the production line changeover) curve, we intend to be at this point X weeks/months from now, but we may not be. He absolutely refused to depart from a factual description of the state of the state and refused to sugar coat the possibility of a slip-up, despite the fact that the analysts were begging him to tell them: 'everything's gonna be o.k.' Then the Q laid off several hundred temps (including presumably chuckj), the downgrades came out, and we got pounded. Thanks for your post. It brought back memories which may be useful for all of us to recall. Mike Doyle

To: Asterisk who wrote (8173)	2/8/1998 11:10:00 AM
From: Gregg Powers	Respond to of 152472

Michael..absolutely correct on the dual-band, dual mode QCP-2700. What can I say, it was late.. As for QC's selling price, you are correct in saying that the transfer price is not obvious (i.e the price from QC to its customers), but that does not mean that it impossible to determine. Most of QC's domestic handset customers are public (i.e. Airtouch, Ameritech, Bell Atlantic Nynex, Bell Mobility, Sprint etc.) so they need to be responsive to investor questions. Within this context it is possible to get a decent handle on handset pricing if you try hard enough. Also remember that QC's handset margins are not obvious from the financials--QPE is a joint-venture with Sony, majority controlled by QC. Phones sold to Sony, call it roughly one-half the production, are priced WITHOUT distribution margin (i.e. just a small manufacturing margin to offset QPE's cost of capital). One must deconsolidate QPE's revenue, and therefore QC's revenue, in order to determine QC's true handset profitability (which is obvious better than the gross numbers suggest). Finally, I truly do not believe that Irwin, Harvey and Tony where being "cute" or Machiavellian on the conference call. They correctly observed that the situation was fluid, and suffered from uncertainty, but based on the then existing order book, felt that QC's results would not be adversely impacted vis-a-vis Street expectations. Bad call, yes.. Deliberate deceit, no..