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

To: bananawind who wrote (31661)	6/3/1999 6:22:00 PM
From: JGoren	Respond to of 152472

Jim, just for fun, let us in on your 2003 max. and a mid-level est. I got my extended battery for the Q today. It does fit with the phone in the leather belt pouch. My only problem is that the battery recharger doesn't seem to charge the battery properly or fully in the handset side of the charger. Only the back for the battery only fully charges. This is the second battery charger with the same problem.

To: bananawind who wrote (31661)	6/4/1999 1:21:00 PM
From: bananawind	Read Replies (2) \| Respond to of 152472

JGoren, Being from the Buffett school of analytics, if I can't reach a conclusion about something with a good understanding of the business dynamics and a few back of the envelope calculations, I don't even try. This view stems from a [healthy, I think] fear of false precision being one of the deadliest of investment sins [all those econometric models at you-know-where did teach me something], and the economic realities of running an investment advisory that does not have several billion under management. So any number I could come up with you could easily replicate. And, as Gregg has already said, what would be the point anyway. It is the exercise of trying to think about such a number, rather than the number itself, that I meant to say is the real eye opener. For instance, there will be something like 35MM cdma subscriber devices sold this year, a year with say 27MM new subscribers worldwide. A few years out these figure are likely to be 75MM devices and 50MM new subs even without 3G. With 3G deployment I can envision every sub having a number of devices. Personally, I can live with just a laptop(with integrated cdma modem module), pdQ-type organizer, Etch-a-Web surfing device, and a phone. Others like Maurice will want the little ear thingie and other fancy gizmos too. Anyway, with 3G not only will the number of new subs accelerate due to new functionality and new markets (europe,asia), but the number of devices per sub and the frequency with which they replace them is likely to increase too. So maybe in 03 instead of 75MM devices, its 150MM devices or more. Better still, all the innovation in devices keeps the average selling prices up instead of declining. So maybe Q still gets the roughly $10 per device they get now in royalty. That's a billion and a half before counting infrastructure royalty. Of course Q makes more by selling a device itself and has a goodly share of the device market. Lets say 20% share at $200 ea. and 20% pretax margin. Adjust the royalty for Q's share of devices and its now up to $2.4 billion pretax profit. Gee, all those devices need asic's. Lets say Q has 60% share at a margin contribution of $12 each, for an additional 1.1 billion pretax, giving us a total of $3.5 billion. Toss in Omnitracs, globalstar, wirelessKnowledge, royalty for infrastructure and non-Q asics and lets just call it $4 billion even. Adjust for taxes and divide by shares out and you've got something on the order of $17.00 eps. End of fancy-pants analysis. Note, depending on the speed of 3G deployment I could very well have used a figure of 150MM subs and 300MM devices - but that would be asymtotic, wouldn't it? Here's something fun to think about - What will Q do with the mountain of cash that will pile up over the next 3 or 4 years? And another one - with as much cash as needed flowing from the core business units, when does Q IPO 10% of Omnitracs (maybe combined with WK for sex appeal) and then spin off the rest to shareholders? Best regards, Jim