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

To: bananawind who wrote (29901)	5/12/1999 2:06:00 PM
From: Ruffian	Respond to of 152472

Q News> wirelessweek.com

To: bananawind who wrote (29901)	5/12/1999 2:15:00 PM
From: quidditch	Read Replies (1) \| Respond to of 152472

Jim, thanks. I guess the questions, among others, would be: -- sustainability of RATE of subscriber growth --maintainability of ASIC (and handset) market share --modeling handset (and thus ASIC) turnover (i.e., existing subscribers sticking with CDMA and purchasing "latest and greatest" new model sets --maintainability of ASIC pricing and base on which royalties are calculated Bottom line, if there is a trendline down in any of these (or others I'm not smart enough to dope out just now) from a cyclical uptrend in the next few quarters, what should be the imputed growth rate (i.e., PE multiple) and, discounting that, when should the new rate be reflected in share price multiples? Any thoughts? Regards. Steven

To: bananawind who wrote (29901)	5/12/1999 2:16:00 PM
From: Caxton Rhodes	Respond to of 152472

Jimbo- So what's that equate to in $/share increase? Ok I'm lazy. I'll pay you back in beers/dogs etc at the new stadium when the fish come to town in 2000. Caxton

To: bananawind who wrote (29901)	5/12/1999 4:18:00 PM
From: straight life	Read Replies (2) \| Respond to of 152472

Jim- I'm embarrassed to ask this as I really should know the answer but: does Q get royalties for each subscriber that signs up from a CDMA operator? I remember the $15 figure... but wasn't sure if it was only based on ASICS and/or handset sales or included a payment from the operator for each subscriber. Thanks in advance.

To: bananawind who wrote (29901)	5/12/1999 7:22:00 PM
From: slacker711	Read Replies (1) \| Respond to of 152472

re: Now, we know that 1Q99 MSM shipments were nine million units. If things continue tracking as before that implies 9.9 million new subs in 2Q99 (calendar) and $148 million royalty for the quarter - WOW! Even the most optimistic analysts are way, way under this figure for their estimate of royalties. Not sure if I'm missing something.....but arent 1Q99 royalties based on the number of ASIC's sold in that quarter (around 9 million). If this is true, then the royalties the Q received last quarter ($77 million) would have been based on this quarter's estimated subscriber growth. If that's around 9.9 million new subs, this would work out to around $8 per phone. I cant remember what they said in the conference call as to how royalties track ASIC's sold. If this is true then next quarter's royalties would work out to 16million * $8 = 128 million. Still not bad.... Slacker

To: bananawind who wrote (29901)	5/12/1999 9:10:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 152472

Jim - We know they have about a 90% market share in chipsets, so guess 5.5 new subs for 1Q99. Low and behold CDG informs us that was exactly the number. New subs and phones sold shouldn't be the same. I don't know what percentage of phones sold are replacements, but I suspect it is easily 25%, thus the total new phones sold last Q would have been at least 7.3M assuming new subs were 5.5M. Worldwide subscriber growth seems to be nicely tracking Q's quarterly MSM shipments on a one quarter lag basis. I think that the lag is less than 1 quarter. After all, if the lag were 1Q then the royalties this last quarter would have been the same as the previous quarter since in the quarter ending 9/30/98 they shipped the same number of MSM's as in the Q ending 12/31/98 and yet the royalties ballooned 1 quarter later. I suspect the delay is more like 1/2 of a quarter. Thus I would have expected royalties on (2.5M MSMs (1/2 of 12/31 Q) + 4.5M MSMs (1/2 of 3/31 Q))/0.9 (MSM market share) = 7.7M handsets sold in Q ending 3/31 as compared to 5.5M in previous Q. This is in contrast to the royalties which went from $45M to $77M in the same time. This is closer to the same percentage increase (77/45 ~= 77/55) which lends credence to the hypothetical 1/2 of a quarter delay. In addition we get a more reasonable royalty rate of about $10 per handset which at $220 per handset is about 4-5% and more what I would expect (Note that as more of the sales become non Korean, we get higher royalties since we owe a large chunk of Korean PCS royalties to ETRI). This means, in turn, that much of the jump in ASIC sales last quarter was seen in royalties last quarter. If we assume ASIC sales next quarter of 12M (1/2 or the BtB) and 90% market share then this implies about $120M in royalties next quarter. As for Qualcomm handset sales, it sounds like they are really boosting capacity. In April they were already exceding their previous quarter average rate by >20%. Thus I would guess handset revenues are likely to go up 30% for the quarter. Altogether I'd be surprised at less than $0.75 pro forma EPS next quarter. Clark PS It should be noted that all of these numbers should be treated with suspicion, but that even with some pretty conservative assumptions Qualcomm is likely to see a pretty big sequential improvement next quarter.