Gorilla and King Portfolio Candidates | Stock Discussion Forums

web analytics

Advertise on SI

web analytics

Strategies & Market Trends | Gorilla and King Portfolio Candidates

Previous 10 | Next 10

To: gdichaz who wrote (54016)	5/13/2003 9:23:43 AM
From: Jim Mullens	of 54800

Cha2, agreed! Excepting EDGE, which is a significant concern should WCDMA not prove to be economically and technologically viable, all known paths to 3G involve CDMA and therefore Qualcomm. As you know, Engineer minimizes EDGE and believes that China and the rest of Asia will tip to CDMA2000 if WCDMA fails to live up to its promise. Regarding the “risk of missing the forest with a focus on the trees”, I try to focus on the metric of Qualcomm’s market expanding from its current 150 million subs (approx) to 1.2 billion this fall (GSM/GPRS capabilities with the MSM6300) and eventually over 2 billion with all flavors of 3G being CDMA based (excepting EDGE). The problem is that few in the “analyst” and journalist communities want to discuss the future in realistic terms. A second problem (as Uncle Frank pointed out) is the continued write-offs of past investments, some of which were necessary to seed the future and some which were just ill advised knowing what we know now of the technology industry implosion. I prefer to look at the forest and agree with you that the Best is Yet to Come and “the future seems bright for Qualcomm over time”. However, I wish your salt would cease being poured over my wounds. To the salt-less future- jim

Share	Recommend \| Keep \| Reply \| Mark as Last Read \| Read Replies (1)

To: Mike Buckley who wrote (54019)	5/13/2003 10:10:53 AM
From: Jim Mullens	of 54800

Mike, re: “Let me get this right. You believe Qualcomm will be extracting revenues from 1.2 billion subscribers this fall? “<< Mike, Qualcomm’s market will include both the total GSM and CDMA communities this fall. I did not intend to leave the impression that Qualcomm would have a 100% market share of that new market. I certainly don’t immediately expect all GSM handsets be MSM6300 equipped, but the market itself will immediately expand. On the other hand, in 7 to 10 years when the world is engulfed in 3G, Qualcomm’s royalty market should represent close to a 100% market share. jim

Share	Recommend \| Keep \| Reply \| Mark as Last Read \| Read Replies (2)

To: Jim Mullens who wrote (54021)	5/13/2003 11:06:22 AM
From: Mike Buckley	of 54800

Jim and Frank, Thanks for that explanation. However, to say that Qualcomm's market will increase 8-fold this fall is not accurate in my mind. I think it's inaccurate and misleading to place Qualcomm's current "market" as 150 million CDMA subscribers. Using that logic, we would say that Apple's market isn't all computer users; we'd say that it's only those that buy Apple computers. Qualcomm's current market is all cellular subscribers, not just those that happen to buy its CDMA products. Similarly, I disagree with the statement that the market will expand thanks to the opportunity for GSM handsets to be MSM6300-enabled. Instead, it's great news that Qualcomm is likely to penetrate the market in ways not previously possible thanks to MSM6300, GSM1x, W-CDMA and all the other products that will come down the pike in the next decade. --Mike Buckley

Share	Recommend \| Keep \| Reply \| Mark as Last Read \| Read Replies (2)

To: Mike Buckley who wrote (54023)	5/13/2003 12:02:23 PM
From: Jim Mullens	of 54800

Mike, I would have to respectfully disagree with your statement- “ Qualcomm's current market is all cellular subscribers, not just those that happen to buy its CDMA products” Qualcomm certainly never had the opportunity to sell CDMA products into the largest GSM market, Europe ( rightly or wrongly) due to government regulation which prohibits anything but GSM. Further, in the past Qualcomm along with many Asian companies were excluded from the GSM market due to excessive royalty rates imposed on all except those in the cartel. Only recently was Qualcomm able to overcome this obstacle with their cross licensing agreements with TXN, NOK etc which gives them royalty free access to GSM IPR. jim

Share	Recommend \| Keep \| Reply \| Mark as Last Read \| Read Replies (1)

To: Jim Mullens who wrote (54024)	5/13/2003 1:07:55 PM
From: Mike Buckley	of 54800

Jim, Qualcomm certainly never had the opportunity to sell CDMA products into the largest GSM market, Europe ( rightly or wrongly) due to government regulation which prohibits anything but GSM. It's Qualcomm's job to use its influence to reduce all obstacles to adoption of its product, including governmental obstacles. The fact that it was not successful doesn't mean that the market wasn't there. By definition, if a market is available to a competitor, it's also available to Qualcomm. Using your logic, had Qualcomm not been successful at influencing China's government, China would not be part of Qualcomm's market. Further, in the past Qualcomm along with many Asian companies were excluded from the GSM market due to excessive royalty rates imposed on all except those in the cartel. Again, that's because Qualcomm's competitors did a better job of controlling that market than Qualcomm did. That's not the same as saying that it wasn't Qualcomm's market. According to your usage, a market is only an area in which a given competitor is somewhat successfull. That's simply not accurate. --Mike Buckley

Share	Recommend \| Keep \| Reply \| Mark as Last Read \| Read Replies (2)

To: Mike Buckley who wrote (54023)	5/13/2003 1:15:55 PM
From: Eric L	of 54800

The Addressable Market for Mobile Wireless Chipsets Mike, << I think it's inaccurate and misleading to place Qualcomm's current "market" as 150 million CDMA subscribers. Using that logic, we would say that Apple's market isn't all computer users; we'd say that it's only those that buy Apple computers. Qualcomm's current market is all cellular subscribers, not just those that happen to buy its CDMA products. >> I agree. The addressable market for mobile wireless chipsets is in handsets destined for new cellular subscribers and that portion of cellular subscribers that replace handsets. The addressable market is ~440+ million this year optimistically increasing to 500+ million by 2005. Tim Luke's reasonable estimates (4/24/03) for the market are below. As for the MSM6300, which addresses a nascent niche market, it will produce no significant revenue this year. Not one single handset powered by it has been announced, and only one handset manufacturer has announced plans to develop a handset based on it. Lehman Brothers Estimates of Global Wireless Handset Demand 2002 2003E 2004E 2005E Total Subscribers 1,110 1,265 1,401 1,525 New Additions 168 154 136 125 % of Total Unit Demand 42% 35% 29% 24% Replacement Handsets 233 285 340 392 % of Prior Year Subs 25% 26% 27% 28% % of Total Unit Demand 58% 65% 71% 76% Total Unit Demand (Sell-thru) 401 440 476 517 % Growth 5% 10% 8% 9% Total Inventory 54 54 55 59 Change in Inventory 2 0 1 4 Total Handset Units (Sell-in) 403 440 477 521 % Growth 12% 9% 8% 9% Wireless Handset Market Estimated at ~$65 Billion in 2003 Source: Company Reports and Lehman Brothers Estimated Handset Unit Market Share by Vendor for 2003 GSM CDMA 1. Nokia 52% 1. Motorola 21% 2. Motorola 15% 2. Samsung 20% 3. Siemens 13% 3. LG 18% 4. Samsung 11% 4. Nokia 13% 5. Sony Ericsson 3% 5. Sony Ericsson 4% - Other 6% - Other 24% Source: Lehman Brothers Global Wireless Infrastructure Market Share by Vendor for 2003 1. Ericsson 29% 2. Nokia 15% 3. Nortel 9% 4. Siemens 9% 5. Motorola 8% 6. Alcatel 6% 6. Lucent 6% 8. Samsung 3% - Other 15% Wireless Infra Market Estimated at ~$41 Billion in 2003 Source: Industry reports and Lehman Brothers Estimates ### - Eric -

Share	Recommend \| Keep \| Reply \| Mark as Last Read \| Read Replies (1)

Previous 10 | Next 10

Copyright/IP Policy

Copyright © 1995-2013 Knight Sac Media. All rights reserved.