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From: leochardonne2/1/2012 8:08:18 PM
2 Recommendations   of 120858
 

Apple's Gravity Field and Qualcomm



Qualcomm‘s strong report and guidance were largely anticipated. Now that QCOM is a key chip vendor for the iPhone empire, it is getting a major boost from Apple‘s substantial winter share gains.

But one number in the report really popped out – Qualcomm is raising its average 3G/4G device selling price estimate by a full $7, into $204-$216 range. That is a stunning hike and could give the stock a multi-week tailwind.

Two other numbers make the guidance particularly sizzling:

Against all expectations, Qualcomm did not lower European unit guidance. After massive misses from Euro-centric vendors like HTC and Sony Ericsson, this was a jolt. It also implies that the Android vendor comments about European market weakness are suspect. That “market softness” might in fact be market share losses to Apple.China/India volume projection rose by 7 Million units. This comes after RFMD cited Chinese 2G weakness for its recent warning. Which means that China may be experiencing faster than anticipated shift from 2G to 3G handsets – not overall weakness of the handset market. The Chinese volume projection hike is an interesting fit with the device ASP increase. Asian 3G prices may be higher than markets have expected.It’s hard not to juxtapose this report and guidance with the stiff recent Nvidia warning. Nvidia cited Tegra 2 weakness as one factor for its substantial revenue softness. Tegra 2, of course, is the engine of Android dual-core smartphones and tablets that are the most direct rivals of iPhone 4S and iPad2 – from Motorola, LG, Samsung, etc.

It is a truism that Apple’s strength is reshaping the entire component market. The topic has been widely discussed for a year or two. But the Qualcomm and Nvidia reports hint that the pace of change is even faster than investors anticipated.

Very soon the entire high-end handset/tablet component market from camera modules to processors to displays may be completely at Apple’s mercy. Only Samsung’s recent success is preventing this from happening right now. If the Android market challenge to Apple fades in 2012, the negotiation power Apple possesses with its component vendors may start to resemble the chokehold Nokia had back in 2007.

Nokia’s brief 50-60% domination of the smartphone market was easily shattered by the Apple/Android challenge in 2010. Smartphone volumes were a mere fraction of the overall handset market back then. Now they are about to hit 40% of global phone volumes.

As a new high-end volume leader emerges, smartphones dominate the entire phone industry – and consumers are being locked into a software system gravity well from which few even want to escape. The balance of power between component buyers and component sellers may be about to shift in a fairly radical way over the next 24 months.

forbes.com 

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From: leochardonne2/1/2012 8:11:45 PM
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Qualcomm Discloses Foreign Bribery Investigation by U.S.


By Ian King and Edvard Pettersson

(Updates with SEC inquiry in second paragraph.)

Feb. 1 (Bloomberg) -- Qualcomm Inc. said the U.S. Justice Department has started a preliminary probe into the chipmaker’s compliance with the Foreign Corrupt Practices Act.

The company said in regulatory filing today it learned on Jan. 27 that the U.S. attorney’s office in San Diego had begun an investigation and that the Securities and Exchange Commission also has inquired about the topic. Qualcomm said in the filing that it believes it’s in compliance with the law and that it’s cooperating with both agencies.

Qualcomm Chief Executive Officer Paul Jacobs said today on an earnings call that the company is in compliance.

The 1977 law bars companies or individuals regulated or based in the U.S. from paying bribes to foreign officials to win business.

Debra Hartman, a spokeswoman for the U.S. attorney in San Diego, declined to comment.

Christie Thoene, a spokeswoman for San Diego-based Qualcomm, didn’t immediately return a call for comment on the disclosure.

--With assistance by Karen Gullo in San Francisco. Editors: Peter Blumberg, Glenn Holdcraft

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

businessweek.com 





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From: phatbstrd2/1/2012 9:03:15 PM
1 Recommendation   of 120858
 

Qualcomm Recommends Rejection of Below-Market Mini-Tender Offer by TRC Capital Corporation



— Qualcomm is Not Associated in Any Way With TRC or This Mini-Tender Offer —




SAN DIEGO, Feb. 1, 2012 /PRNewswire/ -- Qualcomm Incorporated (Nasdaq: QCOM) has been notified of an unsolicited "mini-tender" offer by TRC Capital Corporation to purchase up to 2,000,000 shares, or approximately 0.12 percent, of Qualcomm's outstanding common stock at a price of $55.00 per share in cash. TRC's offer price is approximately 4.5 percent below the $57.59 closing price of Qualcomm common stock on January 18, 2012, the day before the offer commenced. The offer is subject to various conditions, including TRC's ability to obtain sufficient financing necessary to fund its financial obligations arising from the offer.

Qualcomm does not endorse TRC's mini-tender offer and recommends that Qualcomm stockholders do not tender their shares since the offer is below the current market price for Qualcomm shares. Qualcomm is not associated with this offer and urges stockholders to obtain current market quotations for their shares, review the conditions to the offer, and exercise caution.

According to TRC's offer documents, Qualcomm stockholders who have already tendered their shares may withdraw their shares at any time prior to 12:01 a.m. ET on February 17, 2012, the expiration date set forth in the offer documents, by following the procedures described in the offer documents.

TRC has made other similar mini-tender offers for shares of other publicly traded companies. Mini-tender offers are designed to seek to acquire less than five percent of a company's outstanding shares, thereby avoiding many disclosure and procedural requirements of the Securities and Exchange Commission ("SEC") that apply to offers for more than five percent of a company's outstanding shares. As a result, mini-tender offers do not provide investors with the same level of protections as provided by larger tender offers under United States securities laws.

The SEC has cautioned investors about mini-tender offers, stating that "Investors need to scrutinize mini-tender offers carefully. Some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." The SEC's Tips for Investors regarding mini-tender offers may be found on the SEC's website at www.sec.gov/investor/pubs/minitend.htm.

Qualcomm encourages brokers and dealers, as well as other market participants, to review the SEC's letter regarding broker-dealer mini-tender offer dissemination and disclosures at www.sec.gov/divisions/marketreg/minitenders/sia072401.htm.

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To: phatbstrd who wrote (109197)2/1/2012 9:08:18 PM
From: Jon Koplik
1 Recommendation   of 120858
 
TRC -- try ripping off customers

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From: slacker7112/1/2012 10:02:27 PM
8 Recommendations   of 120858
 

Random thoughts on earnings.

- Tero nails it. The biggest datapoint was the ASP increase. It is particularly huge considering that Q took down guidance for 2011 handset shipments in the developed world by 9 million units and increased the developing world by 17 million units. Declining ASP's are my number one worry for Q over the medium term (far more than competition from Intel or nVidia) and this guidance is simply great in light of the geographic mix.

- Qualcomm basically confirmed that the iPhone 5 is going to use LTE. That is the only way that 1/3 of their chipsets will be LTE exiting 2012. Absolutely great news as this will be a very nice driver for chipset ASP's (great news as a customer as well).

- 120% YoY growth in Snapdragon shipments. This is no longer off a small base.

- I was surprised to see the weakness in North America in 2011.. Guidance went down 9 million units. I'm not sure what is driving the downward shift in demand.

- Love the comments on MSM8960. Shipping commercially and seeing stronger than expected demand. Also seeing strong usage of their integrated connectivity solutions. Broadcom isnt seeing it yet, but I think this will hit their combo revenue in 2013.

- TD-SCDMA by the end of the year with a few different chipsets.

- Bought back a small number of shares in the 50's. First time they have ever bought shares that high.

- Disappointing to see the fairly large increase in SG&A and R&D spending. From up 15% to up 18%. That is higher than the 14% growth in profits that they are projecting (though lower than revenue growth).

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To: LEIGH7 who wrote (109149)2/1/2012 10:11:27 PM
From: lml
   of 120858
 
Last stock split occurred when price was about $70. Price before split, and split ratio give indication of stock price range preferred by management, though QCOM split history prior to last split is a bit distorted due to huge run up of stock in '99.

Agree with Jeff-HF, likelihood of split increases substantially if stock can maintain range around 70 price level.

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To: mindy1968 who wrote (109160)2/1/2012 10:12:46 PM
From: lml
   of 120858
 
Mindy, you need to get a news feed. :-) Doesn't your broker offer one?

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To: Art Bechhoefer who wrote (109191)2/1/2012 10:14:36 PM
From: GO*QCOM
4 Recommendations   of 120858
 
There could be a Mirasol reader Tsuanmi coming...lots of companies are no doubt getting in line. When you think about fab production..who would invest into such a monstrosity unless there was huge volume potential.This must be an all or none phenomena with enormous paradigm shifting possibilities.

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To: slacker711 who wrote (109199)2/1/2012 10:35:45 PM
From: ryhack
3 Recommendations   of 120858
 
Slacker-

Nice summary of some key points/metrics from the call. One other item really caught my eye: Qualcomm's accumulating cash hoard. It is at $22B now but with free cash flow accumulating at $1.5B/quarter based on the current run rate. Add in $1.2B from the MediaFlo spectrum sale and another ~ $1B on the Indian spectrum sale and we could be exiting the 2012 calendar year with something approaching $30B in cash and marketable securities. Pretty soon this cash hoard will start amounting to real money! Unfortunately, the majority of the hoard is located offshore (only $6.1B is in domestic holdings) and Bill Keitel stated that Qualcomm won't bring it back onshore due to prohibitive tax treatment. The company plans to be patient with the offshore holdings and wait for a more favorable tax treatment in the next year or two. If Atheros and Mirasol can start contributing meaningfully to revenues/earnings in the next year or two, that would really be icing on the cake. Overall a great quarterly report from Qualcomm...sure don't miss the old days when large portions of the conference calls was spent hearing from the company lawyers on the multitude of suits pending in forums across the globe! --Ryhack

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To: GO*QCOM who wrote (109202)2/1/2012 10:54:15 PM
From: Maurice Winn
3 Recommendations   of 120858
 
Mirasol stampede coming. There seems to be a growing realisation that mirasol is not just good, but really really good [for its purpose]. Last one in is a monkey's uncle. My guess is that discussions about who gets how many screens are reaching fever pitch behind the scenes. HTC, Nokia, Apple, Samsung and swarms of others will have been casually thinking they'll keep an eye on that new-fangled ereader thingy from Qualcomm.

Lately they'll have been thinking "Hmmm, there seems to be some serious interest. We'd better offer to rescue Qualcomm by offering to take a million or three for a bargain price." No doubt they are shocked to find the answer is "Would you like to go on back order for product from our third factory which will be likely to start production late 2013 or wait around for 2015? The prices are actually a little higher than you were thinking. Sorry, we have firm contracts for product available this year and next."

Mqurice

PS: A review of mirasol/Kyobo here: goodereader.com 

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