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To: METMAN who wrote (93289)7/20/2010 12:09:29 AM
From: Rich Bloem
   of 147184
Metman, now that is funny. I also have a Q phone that I keep in my car for $10.00 per month on Verizon. Why I don't know. $10.00 a month just in case I am late somewhere or have a flat tire. Geeez-- I have a Lexus with a towing guarantee, Car insurance with Towing, Triple A with towing ---I guess I am just stupid. Or so lazy I can't call Verizon to cancel the phone.

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To: Maurice Winn who wrote (93290)7/20/2010 8:25:46 AM
From: manalagi
   of 147184
Here we go again just before earnings announcement:

Falling phone prices put pressure on Qualcomm

Posted: 07/19/2010 8:22 PM

These should be great times for Qualcomm, as consumer adoption of smart phones that rely on the San Diego wireless giant’s technology continues to grow in the United States and abroad.

Yet Qualcomm’s shares are down about 25 percent from their peak price of $48.99 on Jan. 8. The company’s financial results have disappointed Wall Street for two straight quarters. And despite the continued rollout of third-generation wireless networks in huge markets such as China, Qualcomm forecasts revenue for its fiscal year ending in September at $10.4 billion to $11 billion — essentially flat to up 6 percent over 2009.

“It hasn’t grown as fast coming off the recession as one would have thought,” said Tavis McCourt, an analyst with Morgan Keegan in Memphis, Tenn. “It’s not as if the business has been disappointing. It’s growing. It’s just not as fast as one would have thought a year ago, when expectations were much higher for a very strong recovery.”

How can Qualcomm operate in a wireless market that’s so strong yet forecast financial results that are so pedestrian? The answer is complicated, in part because Qualcomm’s business is complicated.

Analysts and investors will be watching for positive signs Wednesday when Qualcomm releases financial results for the quarter. Expectations aren’t high. Many analysts will be looking for an end to declines in average selling prices for mobile devices, which have hamstrung Qualcomm’s financial results during the past two or three quarters.

“Handset average selling prices have been coming down a lot faster than what (Qualcomm) was originally alluding to,” said Aalok Shah, an analyst with D.A. Davidson in Portland, Ore.

The trend remains a worry for investors.

“You’re still seeing some pressure on average selling prices, and that has been a concern,” Shah said. “How much price pressure are we going to have going forward? If we start to see the average-selling-price declines level off, I think that is a positive sign.”

Qualcomm also faces increased competition from Broadcom, Mediatek, Marvell and other chip-makers seeking to expand their mobile phone footprint, which is hurting profit margins for Qualcomm’s chip business.

Qualcomm makes money in two ways. It sells chips used in mobile phones directly to phone-makers, and it dominates the radio chip market for Code Division Multiple Access, or CDMA, phones, its core technology.

Qualcomm also licenses its extensive technology portfolio to phone makers, who pay royalties to Qualcomm ranging from 4 to 5 percent of the wholesale price of the phone.

Because royalties are based on phone price, declines in the price hurt Qualcomm’s revenue. Prices averaged about $212 in 2008 and $200 last year. They plunged earlier this year, shrinking to $184. Qualcomm predicts average selling prices will end up in the $182 to $188 range for the company’s fiscal year.

For its part, Qualcomm says the lower price is linked to product mix rather than drastic declines in what wireless operators are paying for smart phones. Carriers sold a larger percentage of low-cost wireless data cards for computers so far this year, for example, which brought the overall average selling price down. The company thinks the product-mix issue is temporary.

The company also believes the future is bright. Subscribers for 3G wireless, where Qualcomm’s technology shines, total about 1 billion today worldwide. The number is forecast to reach 2.8 billion by 2014. CDMA subscriber growth in China alone is expected to top 580 percent over the next four years. Latin America and India also are surging growth markets for 3G.

This 3G growth worldwide should result in enough volume to fuel stronger revenue gains for Qualcomm, as rising volume more than makes up for price declines.

For now, though, prices are falling faster than volume is rising.

“Part of what plays into this is a year ago, everyone thought China’s transitions to 3G would happen a lot faster,” said McCourt, the Morgan Keegan analyst. “When India and China ramp up 3G in a big way, this will be a big large-cap growth stock again. It’s just taking longer than anybody thought.”

But Qualcomm’s growth prospects aren’t set in stone, said Vijay Rakesh, an analyst with Chicago-based Sterne Agee. It depends on just how price-sensitive the markets are in China and India.

“That’s a given,” he said. “In China, while that is a growth market for 3G, they have a propensity to use the cheap solution.”

In addition, the increased competition could create headwinds for revenue gains for Qualcomm.

“You see more and more players getting into this market,” Rakesh said. “The market is big. We see growth coming. The question is how does this market end up between Qualcomm, which is the incumbent, and all the new guys trying to get in?”

Mike Freeman: (760) 752-6751;

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From: Bill Wolf7/20/2010 9:11:29 AM
   of 147184
July 20, 2010, 12:33 PM GMT
Nokia Needs Smarts

The good news for Nokia is that after its profit warning last month, expectations for second-quarter results due Thursday are so low that it’s unlikely to miss consensus.

But whoever sits at the CEO’s desk — and the Journal’s Joann S. Lublin and Niraj Sheth report that the company is searching for a new incumbent — will have probably the No. 1 strategy problem in all of tech-land to deal with.

Rather than reiterate all the issues in detail, let’s just say: Apple, Android, Research in Motion, Chinese equipment vendors. The Apple threat is known and understood, but Google’s Android operating system is perhaps the key long-term problem.

How so? For those long in the tooth, think AOL and the Internet in, say, 1997. AOL was a semi-closed system that was easy to use and pretty cool. Think Apple.

Then, there was an open system called the Internet, which didn’t work quite as well, but was growing strongly and was free. Think Android. OK, before I get email blasts, the analogy is not 100% spot on, but the point remains that Android is openly available and is free for operators to use.

And as Bernstein analysts have pointed out, it’s possible that Android could soon get to 40% vendor footprint as it is steadily implemented across equipment portfolios.

On the plus side, Nokia is currently the world’s No. 1 smartphone manufacturer. But this isn’t the case at the top end, which is dominated by Apple and RIM, with HTC Corp. making big inroads. Then it is also losing out at the bottom end of the voice phone market to cheaper handsets from Asian manufacturers.

So Nokia’s average selling price has been falling steadily, from $65 at the start of last year, to an expected $55 this quarter. Its response has been to focus on a new handset range based on the Symbian 3 and MeeGo operating systems. The company will know during the second half of the year how successful these initiatives have been.

However, my long-term (half-joking) contention is that Nokia, and for that matter Apple, should be covered by luxury goods rather than tech analysts. Having the new gizmo and specking the kit correctly goes some way to creating some brand value, but understanding and ideally creating the new look and feel is the key to success, a factor that is the day-to-day business of fashion.

So the new CEO has a number of big decisions to make on the handset business:

* What operating system or systems the company should use. If it stops using Symbian as some have suggested, could it then become a me-too company?

* Related to this is whether Nokia should continue to fight in every part of the market. If it does, it might need multiple operating systems.

* How it can differentiate its handsets in a world when the look and form factors seem to be merging. Does it need some design and brand input from the luxury goods world?

* How much the company should move into tablets, or for that matter notebook computing. Can the brand be extended that far?

* What to do about the Ovi portal. Can it really match up to the Apple and the Android app stores?

* And lastly, whether the company should do something very different. After all, Nokia has been through a number of big changes in its lifetime — from forestry to television sets and then to mobile equipment.

Onnea matkaan. (I’m told that’s Finnish for good luck).

Dow Jones & Company, Inc.

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From: Bill Wolf7/20/2010 9:46:58 AM
   of 147184
July 20, 2010
Lenovo to Release Tablet PC at Year's End
By MICHAEL KAN of IDG News Service\Beijing Bureau, IDG

After releasing its own handset to compete with Apple's iPhone, Lenovo looks like it may be preparing to take on the iPad. The Chinese company plans on releasing its own tablet PC at the end of the year.

The device will be called the "LePad" and will use the Android mobile operating system, according to recent comments made by Liu Jun, senior vice president and president at Lenovo's Consumer Business Group, and confirmed by the company.

The product's development comes as Lenovo's chairman said earlier this month that Apple CEO Steve Job hasn't been focused on the Chinese market. "If Apple were to spend the same effort on the Chinese consumer as we do, (Lenovo) would be in trouble," Liu Chuanzhi told the Financial Times.

This year, Lenovo began selling its own smart phone called "LePhone." The company has said in the past Lenovo's strategy is to "win" in China before Lenovo begins selling the phone abroad. Lenovo also believes the mobile Internet hardware and services could become 10 to 20 percent of the company's business over these next five years.

Other Chinese companies have also developed their own tablets, with some even billing their devices as imitation iPads. But Lenovo would be one of the larger companies to take on building such a device.

"Lenovo has a strong brand name that resonates with local buyers. That's something that's in their favor," said Bryan Ma, associate vice president for IDC Asia-Pacific, of the company's plans.

IDC predicts that in 2011, shipments for media tablets will rise to 1 million for both China and Taiwan combined. In 2014, that number is expected to grow to 4 million. But how the tablet market in China will develop still remains to be seen, Ma added.

"There are still questions about what applications are (these tablets) going to be used for. What kind of interest will they attract," he said.

As for Apple, the company will start selling its iPad in Hong Kong this Friday. It has yet to announce plans to sell the iPad in mainland China.

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To: manalagi who wrote (93285)7/20/2010 11:14:16 AM
From: A.J. Mullen
3 Recommendations   of 147184

Qualcomm bought the spectrum, channel 55, for $ 100M. And at the most recent auction, channel 56, which has the same characteristics, went for $ 1.3B - PJ,

Don't we wish that our investments have that kind of appreciation ...?

I liked Mossenburger's response - so you have provided an unwanted service in an efficient manner? (Again, not verbatim) It's as if Qcom put a building on a piece of land: no one wants to use the building, but the land has appreciated in value. That's not good management - its wasted opportunity!

The more the spectrum appreciates, the greater the loss. It's not just the immediate dollar value the spectrum. Better use of the airwaves increases the size of the wireless industry - Qcom would gain more royalties and sell more chips.


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To: slacker711 who wrote (93207)7/20/2010 11:19:59 AM
From: Jim Mullens
4 Recommendations   of 147184
Slacker, re: Morons / cash hoard / investment portfolio / Buffett-

An alternative / minority opinion

Part 1-

"The above numbers still dont explain the 95 cent GAAP number though...and that is because the GAAP numbers include the catastrophic (and moronic) losses that Qualcomm suffered in their investment portfolio. Can that happen again?

Unfortunately, the answer is yes. Page 27 of the link above shows a breakdown of Qualcomm's cash portfolio. If anything, the portfolio is actually more aggressive in October of '09 than October of '08. I dont think it can reasonably be expected that portfolio losses would get anywhere near the level of the financial crisis so I would still apply some discount to the '09 number, but clearly there are still some risks.

So basically, I think it is wrong to call the core Qualcomm businesses cyclical....…” however, the morons in charge of this company have made it so because of their passion for trying to extract every last dime out of their cash horde. A passion which has cost shareholders billions over the years.

I dont think I paid much attention to the breakdown in cash holdings when it was first published....however, now that I have, my only conclusion is that PJ and the entire financial team should be fired. I am sure they have done well over the last year with their returns, and I am also sure that it will eventually end badly. If I wanted a management to invest my money, I would go with Buffett….


1) . ”If anything, the portfolio is actually more aggressive in October of '09 than October of '08.


It may be more aggressive in the sense that there has been a significant move out of cash (money market securities with minimal returns… ( 0.5%) and into much higher yielding bonds. However, the stock position was reduced to 13% from 15%.

1.a) An allocation mix of 87% cash/ bonds v 13% stocks does not appear “aggressive” IMO.

1.b) Looking at the 1year returns of 2yr /5 year bonds funds (~2% - 4.9 %) vs <0.5 % on money market funds appears to be a positive move (non-moronic) IMO.

Quarterly Pre-Tax Returns1 as of 06/30/2010
Annualized Returns
Description 1 Year
06/2009 3 Year
06/2007 5 Year
06/2005 10 Year
06/2000 Inception

DFFGX 4.94% 5.20% 4.42% 5.11% 6.19%

Short GovernmentMorningstar Category 4.30% 4.89% 4.04% 4.30% --

BofAML US Trsy/Agcs AAA 1-5 Yr TR USD2Broad-Based Index 4.04% 5.97% 4.85% 5.05%

Quarterly Pre-Tax Returns1 as of 06/30/2010
Annualized Returns1
Description 1 Year
06/2009 3 Year
06/2007 5 Year
06/2005 10 Year
06/2000 Inception
DFGFX 1.90% 3.33% 3.59% 3.66% 4.34%
World BondMorningstar Category 8.81% 6.68% 4.78% 6.43% --
Citi WGBI 1-3 Yr Hdg USD2Broad-Based Index 1.98% 4.19% 4.01% 4.07%

1.c) My recollection is that a few years back Keitel / Granis and company were criticized for being too conservative in their “cash management” philosophy.

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From: BoonDoggler7/20/2010 11:20:07 AM
2 Recommendations   of 147184
Asus Drops Windows for Android in Eee Pad Tablet

Asus is working on a 3G Eee Pad tablet computer, and it will run on Google’s Android operating system. Our friends from the German site Netbook News headed over to Asus HQ and got the details.

The Eee Pad was originally slated to use Windows CE, but has dropped that in favor of whichever flavor of Android will be available at launch. And talking of launch dates, we’re looking at the beginning of next year, by which time Android 3.0 (Gingerbread) should be ready. And the 3G part? Asus will be handing off testing units to telcos in December, so if all goes to plan a Q1 Eee Pad looks good.

Android is likely to be the OS of choice amongst tablet-makers (apart from HP, with its newly acquired webOS and Apple, of course). It’s free, it is designed for mobile devices and above all it doesn’t have to fight against an incumbent Windows market. One of the problems with the first wave of Linux netbooks was their lack of familiarity: people buying cheap computers were used to Windows. This problem doesn’t yet exist with tablets, so Android may in fact become the next Windows.

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From: BoonDoggler7/20/2010 11:26:19 AM
   of 147184
Nokia Needs Silicon Valley Thinking, Investors Say

Nokia Oyj needs a new chief executive officer with Silicon Valley experience who can better position the world’s biggest maker of mobile phones against Apple Inc. and Research in Motion Ltd., investors said.

“The Apple brand promises fun, the BlackBerry brand stands for serious work, but what does Nokia stand for?,” said Ulf Moritzen, who helps manage 1 billion euros ($1.29 billion) at Hamburg-based Aramea Asset Management including Nokia shares. “Nokia needs someone who positions the company in an aggressive and clear way.”

Nokia has interviewed at least two U.S. candidates to replace Chief Executive Officer Olli-Pekka Kallasvuo, 57, and plans to make a decision by the end of the month, the Wall Street Journal reported. Arja Suominen, a spokeswoman for the Espoo, Finland-based company, declined to comment.

Nokia, which has yet to deliver a slim touchscreen that executes commands with a single tap, has cut forecasts twice in three months over delays in finishing the software for the N8, its new flagship handset. Nokia shares have lost two-thirds of their worth, wiping out 60 billion euros in market value, since the iPhone’s 2007 introduction.

Nokia climbed as much as 5.2 percent, the biggest gain since May 10, to 7.12 euros and was up 3.3 percent as of 3:26 p.m. in Helsinki trading. The shares had declined 22 percent this year, valuing the company at 26.2 billion euros.

Nokia may report July 22 that second-quarter net income slipped 24 percent to 287 million euros from 380 million euros a year earlier, according to the average estimate of 26 analysts surveyed by Bloomberg. Sales were probably little changed at 10 billion euros, 43 analysts said.

‘Missteps & Misses’

“Given all the missteps and misses, they need to do something to reassure people that they’re on track to deliver these phones when they’re supposed to,” said Jason Willey, a London-based equity analyst at Standard & Poor’s. “It’s a huge part of the visibility everyone will be looking for.”

Hiring a CEO who has built successful products or turned around a U.S. company could be the first step in making Nokia more competitive, shareholders said. Apple, Palm Inc., Google Inc. and Microsoft Corp. would be desirable companies from which to poach a new CEO, they said.

“It would be a very good step to have an outside CEO with very good software experience, who’s run a company before,” said Michiel Plakman, who helps manage 7 billion euros including Nokia shares at Rotterdam-based Robeco NV. “Investors are very, very negative and skeptical on the progress Nokia has been making.”

Board Reshuffled

Chairman Jorma Ollila and the Nokia board reshuffled executives under Kallasvuo in May but have left Kallasvuo in place as the company’s position deteriorated. Ollila said at the time that management had the board’s support.

“Best would be to poach someone from Apple, but that would cause really bad blood,” said Jacques Abramowicz, a Frankfurt- based analyst at Silvia Quandt & Cie AG, with a “neutral” rating on Nokia. “They might actually call in a manager from Palm, because they had an excellent user interface.”

Hewlett-Packard Corp. agreed to acquire Palm for $1.2 billion on April 29, following months of market speculation Nokia might buy the maker of the Pre and Pixi handsets. Palm Chief Executive Officer Jon Rubinstein earlier led development of the original iPod at Apple.

N8 Delayed

Nokia still hasn’t announced a release date for the N8 or its successors. The company needs to get new high-end smartphones into stores to recoup some of the profits it’s lost by not having a competitor to Apple’s iPhone or handsets running Google’s Android, analysts said.

The average selling price for Nokia devices may have declined to 59 euros in the second quarter from 62 euros a year earlier, according to 20 analyst estimates compiled by Bloomberg. The company may have shipped 112 million handsets for a market share of 34 percent, the analysts said.

“There aren’t many CEO candidates out there who know how to lead a company as big as Nokia,” said Carolina Milanesi, a research director with Gartner Inc. in Egham, U.K. “There’s no question that investors want a change and a significant one this time. But finding the right person is not going to be easy.”

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From: Jim Mullens7/20/2010 12:03:37 PM
4 Recommendations   of 147184
Slacker, re: Morons / cash hoard / investment portfolio / Buffett-

part 2

2) ” …my only conclusion is that PJ and the entire financial team should be fired. I am sure they have done well over the last year with their returns, and I am also sure that it will eventually end badly. “

2.a) Yes, per chart #97 from this years ASM, Q’s investment portfolio did quite well in 2H09. In fact it had gains of $1.6B

Further, almost all of that 2nd half gain ($1.6B) had not been run thru the P&L, meaning there is close to $1.6B in pretax earnings / EPS yet to be booked.


During Bill Keitel’s ASM presentation he spoke about Fy2009 Marketable Securities unrealized investment gains / losses (Chart 97, 1.19 time mark ). Re: FY 2009

“….in terms to properly account for that change in value, the proper accounting is that the bulk of the 1/2 billion reduction in value is reported direct to the P&L as a loss to the P&L. The great majority, almost all of that 2nd half gain in value of that portfolio will not be reported until the gains are actually realized….”

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From: Jim Mullens7/20/2010 12:39:45 PM
5 Recommendations   of 147184
Slacker, re: Morons / cash hoard / investment portfolio / Buffet- Part 3

3) “ If I wanted a management to invest my money, I would go with Buffett…”

Let’s look at FY09 (sept ye) performance between Buffett and Q’s (morons)

..Sept’09…..$101,000 loss of $29.6B / 23%

QCOM’s Investment Portfolio

2010 ASM presentation and Reuters Provestor report


Change in Net Unrealized Gains / (losses) on marketable securities

…1H-09 …. $00.559B Impairment losses on marketable securities / 4.9%

…2H-09….$01.600B gain - reflects on balance sheet but **NOT** on P/L (until assets sold), meaning there is close to $1.6B in pretax earnings / EPS yet to be booked.

I could be wrong, but it seems to me taking the impairments in FY08/09 when the world financial market were in total disarray and setting-up $1.5 - $2B in future earnings /EPS to be booked at a later date may prove to be a shrewd decision on balance.

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