|To: veritas501 who wrote (109367)||2/6/2012 4:44:20 PM|
|From: Art Bechhoefer||Respond to of 117481|
|The notion that CDMA use is declining in Latin America overlooks the fact that upgrading from pure 2G systems like GSM to 3G, meaning WCDMA, is increasing. As has been noted over the years, Qualcomm makes chips and gets royalties on virtually all types of wireless that depend on some form of CDMA, whether WCDMA, UMTS, HSPA, TD-SCDMA, or CDMA2000. Added to that is Qualcomm's penetration in LTE markets, where currently most of the chips supporting LTE and other CDMA related systems are made by Qualcomm.|
Although the sheer numbers of wireless device subscribers in China are increasing, what's really encouraging is the small number of 3G and 4G subscribers and the rapid change to those services. But the rate of change to 3G and 4G in China is about the same as in Latin America, which makes me wonder why you seem overly pessimistic on Qualcomm's future.
Meanwhile, mirasol IS a problem because of the relatively small output coming from a huge investment of probably close to $1.5 billion so far. What we've seen of mirasol sales is really small. One company in Korea and now one company in Taiwan is selling e-readers. Probably the total production from both these companies is still leass than 400,000 units. In other words, the return on this investment, which started several years ago, is still negative.
One other problem you did not mention seems to be the amount and impact of competition for processors that do somewhat the same things as Snapdragon. Qualcomm has a nice foothold in this market, but surely Apple isn't a customer, since they have their own processors in the iPhone and iPad. Competition could result in lower prices and margins for what was supposed to be Qualcomm's bread and butter products.
To sum up, the notion that "most of CDMA subscriber growth is coming from Asia" and ". . . it's actually declining in Latin America" seems a bit off base.