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

To: JGoren who wrote (26796)	4/12/1999 1:05:00 PM
From: quidditch	Respond to of 152472

I would agree. While margins (as a percentage of revenue) are higher on royalties than other sources, absolute margins on ASIC and handset sales are probably much higher than royalty stream absolute margins. See my Sunday post re Q's 10Q for three months ended Dec. 27, 1998, royalties, license fees and development fees combined accounted for only 5% and 6%, respectively, of revenues during that quarter and the comparable 1997 period. What made INTC so formidable is that no one could touch their silicon, viz. the continuing agonies of AMD and NSM. And, as the earlier post to Art observed, $2billion over five years is significant revenues, to anyone. On a separate theme that relates to the first if other ASIC makers grab the lion's share of the market, assuming that the "facts" asserted by the Tero pariah are true in whole or in part, does any one on the thread believe that these are positives for Q in the near term, even if, as we believe and hope, GSM will prove to have been, within 5 years or so, an obsolete legacy architecture? Granted, and happily, the market today is bidding Q up. Barron's, good TA and perhaps moving forward after its mini-consolidation last week. To preempt unnecessary tangents, please recall I'm long for years to come and have been since last summer. But if GG is correct in his analogy, what are we missing here? Regards. Liacos_samui.

To: JGoren who wrote (26796)	4/12/1999 1:09:00 PM
From: Wysiwyg	Read Replies (1) \| Respond to of 152472

JGoren, Qualcomm will not become the next "Intel". It's fate is better than that. Intel doesn't publish its microcode for others to use. It merely prices its chip so obscenely high that it encourages others to re-engeneer and produce a cheaper chip. Intel must then figure out some way to get their copiers off their track. It's a costly and at times futile effort, but they have played the game well. Qualcomm wastes no energy unproductively discouraging others. Qualcomm invites others to come up with a better chip with a reasonably priced licensing agreement. All the licensees have to do is follow the guidelines in that big binder that contains the IS95 specs. Ask Motorola or Phillips how easy that is. And when they do they still have to pay Qualcomm a royalty; something that AMD and Cyrix do not have to do. Regards, Wysiwyg

To: JGoren who wrote (26796)	4/12/1999 1:51:00 PM
From: straight life	Read Replies (1) \| Respond to of 152472

Just because they announce their 1st generation chip doesn't mean they'll successfully manufacture it in bulk or that it'll stand up to Q's 5th generation chip. There's many a slip between the cup and the lip...

To: JGoren who wrote (26796)	4/12/1999 3:28:00 PM
From: engineer	Read Replies (1) \| Respond to of 152472

This same thing took place with Intel a few years back. Everyone bought alot of AMD stock and predicted that when AMD made the first 486 chips, that it was the end of Intel. It didn't happen. Intel stayed ahead with new patents and new technoliges and new marketing. AMD services a fair percentage of the market today. The K6 chip is good, but it does not come close to the Intel chip in total market share and performance. And those that went out and bought AMD lost their shirts..... also look at it this way, any time you make the pie bigger and keep relatively the same percentage, you are doing better. So if Samsung wins another 200M subscribers by doing this and Qualcomm get some percentage of this in royalties, rahter than Qualcomm trying to keep all the numbers themselves, then isn't this still a net win? I think that Qualcomm will stay the #1 choice for these chips due to performance, features, and time to market. Others may want to build their own, but if they bet wrong (like Nokia did...), they stand to loose the early entry into the market. How much did this cost Nokia and Moto in market share? Moto finally bought into Pantech to get the QCOM ASICS and an early entry phone. This was after years of showing StarTacs based on their own chipsets. So to save some small percentage or so on the phone costs, they risked and lost all the market share, rahter than buy the ASICS while at the same time working to get their own chips into place and keeping the market share.