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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: matherandlowell who wrote (195012)	7/31/2025 4:45:35 PM
From: Art Bechhoefer	3 Recommendations Recommended By Doug M. Lance Bredvold lml Respond to of 196781

J. -- My understanding of the effect of Apple using its own modem instead of Qualcomm's modem is the loss of modem sales to Apple was already baked into Qualcomm's guidance for the current and future fiscal years. In other words, the guidance has a value of zero dollars for modem sales to Apple, even if it turns out that Apple still buys some QCOM modems for certain higher end iPhones (I doubt it. They'll just try to get by with their own modem.). But because Apple uses some QCOM patents in all its phones and any other devices that may use QCOM patents, they still pay royalties. A lot of analysts seem to think that Apple's modem effectively ends all revenues paid to QCOM, including even the patent royalties. As to the effect of tariff revenues, first of all, the tariffs that are now taking effect are in many cases much less than what had been decreed initially, reducing the estimates of tariff based income. Meanwhile, they cut income taxes and provided additional relief for certain industries like oil and gas rights on federal land. So the subsidies built into the tax cuts, combined with less tariff revenues than had been estimated in the bill that Congress approved, increase the overall budget deficit above initial estimates in the bill, which is now law. Increasing the gap between tariffs, tax revenue cuts, and authorized expenditures effectively increases the money supply even if interest rates remain constant. I happen to believe that the latest tariff reductions assure that tariff revenues will not begin to replace the value of tax cuts in the new law. Remember that some of the new tariffs haven't even gone into effect. Also remember that higher costs for goods subject to the new tariffs will reduce demand for those goods, especially where demand is elastic (price sensitive). Tariffs are worse than a flat tax because tariffs apply to only certain types of imports from certain nations, not universally, and the burden is on those who spend a greater portion of their discretionary income on the resulting higher priced items; namely lower income households. I agree that "He is using trade policy to leverage his political income on the world stage." But the outcome may surprise him and his supporters. Read an article in the July 26 issue of The Economist, entitled "The Curvature of Power," which cites a measure invented by Albert Hirschman in 1945, which when applied to a country imposing tariffs on its weaker allies, could result in a LOSS of overall political power. As to legality, it appears that the Supreme Court is willing to condone literally anything these days, so maybe the tariffs will stick. But the limits to any policy held to be constitutional may apply if the policy is arbitrary and capricious, done for personal reasons (as in the latest proposed tariff on Brazil). Art