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

To: marginmike who wrote (30387)	5/19/1999 8:36:00 PM
From: Robert Sheldon	Read Replies (1) \| Respond to of 152472

Look at this do-do. What a joke . . . ** Hambrecht & Quist Hambrecht & Quist Hambrecht & Quist ** Company: QUALCOMM Inc. Price: 105 Recommendation: Market Perform Notes: a, f Date: 5/18/99 Qualcomm Strong in the Short Term, Faces Difficulty in 2H99 The elimination of handset subsidize in the Korean market will impact QCOM's chipset sales but will be offset in the sort-term by accelerating handset demand in the US & Japan. QCOM faces problems in holding market share and ASP against the Motorola and Nokia in 2H99. 1998 A 1999 E 2000 E Q1 EPS $0.25 $0.32A $0.68 Q2 EPS 0.18 (0.30) 0.58 Q3 EPS 0.16 (0.01) 0.56 Q4 EPS 0.27 0.58 0.54 FY EPS 0.86 0.60 2.35 FY REVS (M) $29.4 $31.0 $33.5 CY EPS 0.94 0.95 2.30 CY P/E NM 112 46.1 FY Ends Sep Current Price $105 7/8 52-Week Range $19 - 119 Market Cap(M) $15,364 Shares Out(M) 145 Book Value $14.89 Net Cash/Share $2.83 3-Year EPS Growth 20% CY99 P/E-to-Growth 557% Decline in Korean chipset demand will be offset in the short-term by increased demand in other geographies. Strong CDMA The elimination of handset subsidies by Korean carriers has and will continue to slow handset demand in Korean. Given that Korean phone OEM's export much of their production to other markets, this decline will probably be offset in the sort-term by strong growth in CDMA subscriber growth worldwide. Chipset sales should slow in 2H99 as other ASIC manufactures ramp production. In the long term, Qualcomm's chipset sales may slow as the company's largest customer, Samsung, begins manufacturing it's own handset chips and reduces its ASIC purchases from Qualcomm and DSP Communication expands the customer base for it's competing devices. Although QCOM will collect royalties on DSP chip sales, it only collects handset royalties from Samsung and therefore only stands to loose revenue once Samsung ramps production to supply its own needs. QCOM will post solid growth in the June quarter but faces difficulty in 2H99. Strong CDMA subscriber growth in the US, Japan and Latin America will continue to fuel demand for Qualcomm's products in the short-term. However, very strong demand for Motorola's CDMA StarTAC and the introduction of CDMA versions of Nokia's 6100 handset in 2Q, 5100 in 3Q and 8810 in 4Q will cut into QCOM's market share later this year. More importantly, Qualcomm is likely to face much steeper handset price declines than in past years as the more popular models from Motorola and Nokia grab the premium market segments.