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

To: Ramsey Su who wrote (8451)	2/12/1998 9:49:00 AM
From: JMD	Respond to of 152472

Ramsey, thanks for the couter-view to Sidman. My guess from his prior posts on Motley is that he's in the "Q Management HoodWinked Us Shareholders" camp. He's been having bad hair days ever since last Thursday, never heard of him before that. Mike

To: Ramsey Su who wrote (8451)	2/12/1998 10:18:00 AM
From: Gregg Powers	Read Replies (6) \| Respond to of 152472

Ramsey: to address the "Motley" comments point-by-point. (1) Domestic Korean handset demand (and the concomitant chipset sales) remains "cloudy"; but let's calibrate this point. After visiting South Korea, and presumably speaking with a number of system operators, BT Alex Brown analyst Brian Modoff estimated that Korean "net adds" (i.e. additional cellular subscribers) will come in around 5mm during calendar 1998. This is less than prior estimates, but hardly represents a cessation of opportunity--5mm net adds equals one-half the CDMA subscriber base at year end.. External Korean handset demand (and the concomitant chipset sales) will be driven by worldwide CDMA network development in the U.S., Japan, Canada, Hong Kong, China etc. System growth here appears unabated (and royalty streams are denominated in dollars--not won). Any allusion to "cloudiness" recognizes that SEA is in a volatile state right now, limiting visibility versus prior periods AND what would you expect Irwin to say after the last two week experience? (2) please try to understand that lower handset prices are NOT a bad thing. Collapsing handset prices are the bear's favorite bogeyman. BUT: (a) lower selling prices increase the competitiveness of CDMA vis-a-vis GSM & other TDMA based technologies and (b) QC is providing the (profitable) chipset and collecting royalties from Korean handset sales, so the sale is quite profitable for QC and (c) QC obviously doesn't have to pay itself a royalty or chipset margin when QPE builds a handset. All else being equal, I estimate that this provides QC with something between a 6% and 9% margin umbrella versus the competition--think about this point carefully--because it's very important. Over the long-run, QC has an embedded margin advantage in any price war. (3) Gee..in the world accord to Mr. Fool, if Samsung handsets sell poorly that's bad; however, if Samsung handsets sell well, that's bad too. Just anyone think his reasoning is superficial besides me? (4) the investment issue vis-a-vis the "Q" phone is simple. Is there something inherently flawed with the design, functionality or form factor that would necessitate a material pricing discount to Motorola's analog StarTac? I would argue no. Accepting this, then the slowing "Q" sales are--as stated before--due to the phone being a digital-only product being sold into an immature digital network (against the QCP-2700, which offers analog default when coverage fails). This is not a complicated point to understand, but it is any easy issue to misrepresent (ie the world is ending for the "Q"). (5) Moving into Q3 and Q4, QC starts to book meaningful infrastructure revenues from the Sprint expansion (through Nortel), Chilisat, Ukraine and Globalstar. Japan will be launched, domestic networks (800MHZ and 1900MHZ) will continue to mature, the 800MHZ "Q" will be available and CDMA will continue its expansion around the globe. Sorry--I just don't see the sky falling in. But, I'm not short the stock either. Good luck everybody!

To: Ramsey Su who wrote (8451)	2/12/1998 10:29:00 AM
From: bananawind	Read Replies (1) \| Respond to of 152472

Ramsey, Your comments about Q-phone demand imply that price is a large factor. The biggest mistake, (my opinion), is the Q phone. I think the co clearly overestimated demand, especially in Korea. Sounds like they are moving production capability to the lower lines which are still in high demand. In one of his posts Gregg Powers recently stated that this (price sensitivity) is currently not a major factor in Q demand. He said the falloff domestically was due to the slowness of the PCS buildout in some areas, which leads to spotty coverage. This in turn leads to either a dual-mode choice, a non-cdma choice, or a non-subscriber. I can confirm that this is the case in the state of Florida, where Primeco has a much larger footprint than Sprint, but both are far from having statewide coverage. In my own neighborhood four PCS operators have been held up for seven months by a county moratorium on towers. I've heard this is going on all over the country. Although the Communications Act says local govs can't ban the towers, it gives them enough room to allow local politcos to make some hay with the NIMBY crowd and delay things for quite a while. IMO, none of this constitutes making a "mistake" with the Q-phone, and having Hansol cancel their Q-phone order can hardly be attributed to poor management. -JLF

To: Ramsey Su who wrote (8451)	2/12/1998 2:18:00 PM
From: Clarksterh	Read Replies (2) \| Respond to of 152472

Ramsey - 5) The discussion regarding basestations focused more on vendor financing. I think Sidman is confusing vendor financing with buying business. OK, now I am confused. How do you believe 'vendor financing' and 'buying business' differ from one another? I used to work at Hughes Space and Telecommunications, and many of the countries wanting satellites wanted 'financing'. Hughes, having the number one market share, and the most reliable geo birds, often told them to fly kites. It was only the wannabes (eg Matra) that would cater to their wants (often to their future detriment as the buyer later defaulted). Hughes definitely viewed the vendor financing as buying business. And the same goes for Telecomm. I did a stint recently as a consultant on a WLL project, and many of the smaller vendors view Qualcomm as buying business with their 'vendor financing'. Whether you view it as vendor financing or buying business depends on whether its you or your competition that is doing it.The only thing that really counts is what the terms are. Do they allow for siezure of assets in a country where such things are allowed? Does the buyer have a reasonable debt to equity ratio? Etc.. Does anyone know what terms QCOM is giving? Clark