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From: Bill Wolf	4/20/2012 10:15:05 AM
	2 Recommendations of 117497

Samsung Outsold Apple In Smartphones In Q1, Analyst Says Next Tuesday, Apple will report results for the March quarter. The Street is expecting the company to sell in the vicinity of 32-33 million iPhones for the quarter. That’s a lot of smartphones. But it might not be anywhere close enough to make the company the calendar Q1 smartphone champion. ACI Research analyst Edward Zabitsky asserts in a research note that Samsung in the quarter sold over 40 million smartphones, grabbing the title of global smartphone unit king. And the competition from Samsung, the analyst asserts, continues to intensify. He notes that the company on May 3 will launch the Galaxy S3, the latest edition of its flagship smartphone, which he thinks will include an internally developed quad core processor called the Exynos 4412, their own LTE/WCDMA baseband processor, and a retina quality, low-power Super AMOLED+ display, also made by Samsung. Zabitsky, who might be the one true bear on Apple in the analyst community, contends that Samsung, and not Apple, is the low-cost producer in smartphones. He says that Apple’s purchasing power is matched by Samsung – but he notes that Samsung designs and manufactures $60-$80 of components in every high-end Galaxy phone, while Apple designs about $25 of the components in the iPhone 4S. He notes that “Samsung’s internally sourced displays, processors, and memory require a low incremental cost to produce.” There are some on the Street who don’t always listen to Zabitsky; they view him, his Sell rating and his $270 price target the way you might look at a guy in a white robe and long beard walking around with a sign that reads “The End Is Near.” But in this case he has a point, which is that the real enemy for Apple in the smartphone market is Samsung. With RIM and Nokia struggling to remain relevant in the smartphone market, and HTC stumbling in recent quarters, in the long run the battle for supremacy in mobile phones could come down to two behemoths: Apple vs. Samsung. The companies are already in the process of trying to bash each other’s brains in with patent litigation around the globe. Apple meanwhile is among Samsung’s largest customers, buying memory chips, displays and other components. I’m not saying Zabitsky is right on the stock. But he has a point here: Samsung is a formidable rival. forbes.com

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To: hedgefund who wrote (111304)	4/20/2012 10:32:33 AM
From: Jim Mullens	of 117497

Hedgefund, re: Your suggestions / better way ?................................................ Surely there was a more intelligent way to manage expectations than to be compelled to divulge the implications during a quarterly conference call. When did management learn the implications of this shortage, yesterday when it was preparing its remarks? >>>>>>>>>>>>>>>>> 1) the 28nm rumors were floated in the media for quite sometime. 2) at the prior earnings CC, I believe it was mentioned that the 28nm conversion was moving along per plan with no yield problems. 3) just prior to Q's earnings CC, TSMC stated no yield problems, but demand was outpacing supply and "the worst was behind them". This was reassuring to me, as the negative impact from 28nm issues was my major concern going into earnings. 4) I don't recall any of the analysts following QCOM / TSMC expressing major concern over a Q3 MSM push out due to 28nm demand being higher than capacity. However, I now recalling hearing somewhere words to the effect FY12 guidance could even be higher if they had the fab capacity to mfg more Snapdragon / 28nm chips. During the q1 CC this was stated… ….+ “ …Our MSM 8960, the flagship of our Snapdragon S4 family, is now shipping commercially to customers as scheduled. Volume production is ramping, and we are seeing strong OEM demand for that chipset even above our prior expectations.” 5) WRT guidance, despite Q3 being under analyst expectations, the full FY12 EPS MP was increased by 4 cents to $3.69 with reiteration of prior full year revenue guidance. So, the “problem” appears to be failing to meet / beat analyst expectations….as you opine, “managing expectations”? FY12 ………………..QCOM…….Consensus ..+ Revenue….$19.2B MP…..$19.37B MP ..+EPS …..4/16………$3.65 MP……..$3.77 …..4/18………$3.69 MP >>>>>>>>>> Question to you… …Your suggestions on how to more intelligently manage expectations??? Or, is the “problem” ($4 + price decline) more the result of over reaction by the trading community…(Hedge funds / HFTs / Speculators / Manipulators) ? After all, how are these folks expected to make a buck (millions / billions) without excessive short-term price swings? .

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From: Jim Mullens	4/20/2012 11:35:13 AM
	of 117497

Chimerical …………………………………………………………….......................................... chi·mer·i·cal [ki-mer-i-kuhl, -meer-, kahy-] Show IPA adjective 1. unreal; imaginary; visionary: a chimerical terrestrial paradise. 2. wildly fanciful; highly unrealistic: a chimerical plan. >>>>>>>>>>>>>>>>>>>>>>>>>>>> Love this from one of the analysts , raising his QCOM target from from $72 to $80. In our view, the chip-scarcity issue is somewhat chimerical, as the head of semiconductor operations acknowledged that Qualcomm does currently sell many of these chips. The bottom line is that Qualcomm raised its EPS outlook rather than cut it despite the chip-scarcity problem. They also pointed out that during the CC QCOM reiterated their FY-YE run rate target for LTE enabled chips to ramp quickly to 1/3 of the total, whereas today its “pretty small” per Steve M .

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To: Jim Mullens who wrote (111309)	4/20/2012 11:50:02 AM
From: waitwatchwander	2 Recommendations of 117497

---> Chimerical, eh From: John Cooley <jcooley=user domain=zeroskew got calm> Subject: After 14 weeks, TSMC now finally admits it has 28 nm problems A story that started 14 weeks ago when Future Horizons CTO Mike Bryant said at a London conference that: "Six out of ten of TSMC's 28 nm customers were reporting yield problems." - ElectronicsWeekly.com (01/20/12) Then 7 weeks ago the story exploded with: "TSMC shut down 28 nm production about three weeks ago. No, we are not joking, word has reached SemiAccurate that TSMC halted 100% of 28 nm production in mid-February to make unnamed changes to the process." - SemiAccurate.com (03/07/12) Then 7 weeks ago (minus 2 days) TSMC replied: "Regarding this issue, our policy is not to comment on market rumors. However, I want to inform you that our 28 nm production is normal, and all our 28 nm customers are fully aware of our production status." - DeepChip.com (03/09/12) Which 3 weeks ago triggered user responses like: "What exactly is 'normal' 28 nm production? Normal vs. what? It took them 2 years to get 40 nm up. Is that 'normal'?" - DeepChip.com (04/04/12) ---- ---- ---- ---- ---- ---- ---- Since then this TSMC 28 nm story has now had 5 new major developments. First, 13 days ago DigiTimes speaks up: "TSMC 28nm foundry capacity has been drastically short of demand for Qualcomm, AMD and Nvidia mainly, but the shortage is expected to relax at the end of the third quarter of 2012, according to industry sources." - DigiTimes.com (04/06/12) Then 10 days ago TSMC makes a new public statement: "We are working very hard trying to solve the 28 nm capacity shortage issue. Not only is our fab is trying to squeeze out more output, we plan to increase capital spending for 28 nm this year." - TSMC's Elizabeth Sun to Bit-Tech.net (04/09/12) Then 2 days ago DigiTimes talks about yield: "TSMC reportedly is having yield problems with its 28 nm nodes causing the difficulty in ramping up the process capacity. There is also speculation the foundry had been trying to control the availability of its 28 nm capacity as insufficient yield rates would affect its gross margin performance." - DigiTimes.com (04/17/12) Also, 2 days ago the CEO of TSMC speaks up: "Yes, we had some difficulties with 28 nm, but those difficulties had to do with not having enough capacity, not yields." - TSMC's Morris Chang in EEtimes.com (04/17/12) ---- ---- ---- ---- ---- ---- ---- Regardless of whether it is yield or capacity issues that are preventing TSMC from meeting customer demand, Digitimes.com reports that companies are now looking at second source 28 nm fabs: "The reported tight supply of chips built using TSMC's 28 nm process technology is likely to drive Nvidia and Qualcomm toward other foundries as a second source ... Nvidia has begun sampling chips on Samsung's 28 nm ... Qualcomm has approached UMC and GlobalFoundries for additional capacity." - DigiTimes.com (04/17/12) For my Wall Street readers, the reason why TSMC is stressing that this is a capacity issue is because CAPEX spending means you can buy more manufacturing equipment to fix the problem. If it's a yield issue, it means TSMC is facing technical problems which can not be fixed by buying more manufacturing equipment. - John Cooley DeepChip.com Holliston, MA

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From: FWS	4/20/2012 12:08:11 PM
	3 Recommendations of 117497

If I was Nokia and saw we were at the smartphone tipping point in China, and time was of the essence , i'd be Focusing Major effort in China too. Rememer their slogan, a device for the next billion smartphone users. Hoping this is true. =========== esphoneblog.com Nokia’s Windows Phone series entered China with a bang a few weeks ago. China is by far the world’s largest mobile phone market, so it is crucial to sell well in there. Luckily for Nokia, it appears that the Lumia 800C is doing pretty well on China Telecom, the country’s third largest carrier. According to China Telecom’s website, the Lumia 800C is currently the second most sold phone. The top spot is held by the Apple iPhone 4S. Top 10 by China Telecom (at the time of writing this post): Apple iPhone4S 16G black Nokia lumia 800C blue Huawei C2856 black Huawei C8650+ black Motorola XT681 American White Huawei C8860E black Cool 5,820 purple Samsung i559 grey Huawei C8500S black Samsung i809 Flash silver ======== mynokiablog.com Lumia 800 on China Telecom’s Best Seller list Jay Montano \| April 20, 2012 \| Comments (32) China Telecom has about 18 times the amount of mobile subscribers as the entire population of Finland. 90M mobile subscribers – and they’re not the largest in China (China Mobile has >660M). That is still incredible and more than the population of the whole of the UK and 6 Finlands combined so you could say there’s some significance to being liked there. China is a very important market for Nokia, and also critical for Lumia to be popular there too. According to China Telecom, the Nokia Lumia 800 is in their best sellers list, at number 2 just behind the iPhone. ============ conversations.nokia.com China says Ni Hao to the Nokia Lumia Key smartphone launches in world's biggest market Published by Karen Bartlett on March 28, 2012 BEIJING, China – It’s arrived. The world’s largest and fastest-growing mobile market now has a truly great smartphone. The Nokia Lumia has launched with China Telecom in a ceremony held at the Yongdingmen Gate – the oldest, and most important, entrance to the city of Beijing. Nokia has a long tradition of providing Chinese users with all of the local functions and services they need, and the Nokia 800C has been tailored with exclusive apps and services for the Chinese market. Announcing the launch, Nokia CEO Stephen Elop said: “We’re excited to introduce our first Lumia smartphone, the Nokia 800C, to this important market with our exclusive launch partner, China Telecom. Working closely together, we’ve created a compelling, locally relevant experience on the Nokia 800C especially tailored for people in China”. The Nokia 800C is the first CDMA Windows Phone in China, featuring Windows Phone 7.5, and operated on the country’s most extensive and reliable 3G network. Nokia offers Lumia users in China access to major Internet services including Sina, SOHU, Tencent and Renren. Wang Xiaochu, Chairman of China Telecom, said the launch represented “Optimism and excitement for the future of Windows Phone and Nokia Lumia in China.” China Telecom’s mobile market in China is bigger than Verizon in the U.S. – and, according to research by Strategy Analytics, over 32 million smartphones were sold in China in the last quarter. We estimate that’s a massive rate of four smartphones per second. This promises to be only the start of the Nokia Lumia experience in China, with the launch later in Q2 of the Nokia 610C, aimed at younger users. A global phone with a uniquely local experience: The Nokia 800C has the same head-turning design, eye catching Windows Phone user interface – and great Nokia services that has made the Lumia the must-have smartphone of 2012. Nokia experiences, including Nokia Drive, Nokia Maps, and Nokia Music have been optimized for Windows Phone – and are only available on the Nokia Lumia: Nokia Maps, provides easy-access, three-dimensional maps of China, and over 190 countries, as well as local content from Fantong, Jiepang, Ctrip, Qunar and Soufun. Nokia Drive, brings free, voice-guided, turn-by-turn navigation to China, and also comes with offline navigation. Nokia Music brings a single music hub with unlimited free music for 12 months in mainland China. It also includes MixRadio, a free, global, mobile music-streaming application that delivers hundreds of channels of local and international music. The Nokia 800C also has exclusive applications and services, just for China: With the Nokia Lumia in China you can download more than 20,000 apps from the Marketplace – and get integrated music, games, cartoon, video and reading apps right on the Nokia Lumia 800C home screen. As from today in the Marketplace, Nokia Lumia smartphones in China will also have access to magazine applications from Trends,which will launch Cosmopolitan first for Nokia Lumia smartphones and provide Nokia Lumia consumers free access to FHM, Harper’s Bazaar and Esquire. For people using a Nokia Lumia smartphone in China, Nokia will soon offer 100,000 free downloads of the hit gaming titles Fruit Ninja and PVZ through the Nokia Collection in Marketplace. Every journey starts with a single step: Nokia and Microsoft also announced the ‘Be Top’ program, which is designed to encourage and support developers in creating great new applications on Windows Phone specifically for people in China. The Nokia 800C is about more than a smartphone, it’s about building an exciting new ecosystem in China – and today was the first step in that journey. The Nokia 800C will be available in China in black and cyan in early April.

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To: hedgefund who wrote (111310)	4/20/2012 12:46:34 PM
From: Jim Mullens	5 Recommendations of 117497

HF, re: managing expectations. a pre earnings statement in a public forum that 28nn demand was so great that it would require new chip sourcing and additional costs. >>>>>>>>>>>>> Thanks for your reply. Hard to say if the market reaction would have been much different then? Market movers thirst for “news” of “problems”, warranted or not. I doubt of just releasing a PR would work without a full-blown webcast for Q&A. Then you’ve got to “coordinate” what’s said with your suppliers and customers so as not to offend them. …i.e.--- how is this going to affect the “eat one everyday to keep the doc away” company, does this mean no new product launch until after the holiday season???? If the stock plunged like yesterday, then we’d have some folks say… what jerks they were issuing that special warning when the EPS for the year is actually being increased. Then at the earning CC I doubt the questioning would end, just a repeat of the same stuff asking over and over, and maybe another round to share price attacks. Actually we were “pre-warned” in the Q1 CC, only at that time we were able to significantly increase EPS / Revenue above analyst consensus. *“….we are seeing strong OEM demand for that chipset even above our prior expectations.*” Perhaps, Paul / BK at that time should have “held” some of that increased guidance back, saving some for the 2nd quarter? And, what are the repercussions from that? Market movers will do what market movers do, something its hard for us to accept / get used to.

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