| To: JeffreyHF who wrote (122652) | 11/3/2014 3:27:42 PM | | From: Jim Mullens | | | | Jeffrey, re: Foxconn vs Apple royalty………………
There's still a question of ASP caps on royalties. Do we know whether having Foxconn pay, rather than Apple, actually lowers QTL's revenue?
>>>>>>>>>>>>>>>>>
Good point. I don’t think we do.
This article provides the iPhone 6 and 6+ BOM detail, $227 / $242 respectively.
http://www.forbes.com/sites/chuckjones/2014/09/24/apples-iphone-6-teardown-and-other-costs-analysis/?partner=yahootix
Adding 10% for Foxconn’s markup yields 250 to $260. I also recall that in instances where the royalty base was on the 3rd party manufacturer and not the retail seller, the royalty rate was higher. I’m not sure if the cap is $250, $300, or $400.
One other item, QCOM’s device ASP metric in based on Apple’s unsubsidized selling price of $600 -$800 and not Foxconn’s sales price to Apple. This has two affects of the device ASP metric.
1. Using the higher ASP lowers QCOM’s implied royalty rate
2. With ASPs above caps, ($ Apple – Foxconn issue) declining ASPs increase the implied royalty rate.
Alt 1
………………………….Units….ASP….. sales $.......royalty Base…Royalty @ 3.5%
iPhone ASP……………..100….$650…..$ 65,000
Royalty Cap…………………….$260……………….$ 26,000………….$ 910
Other units………………900…..$190….$171,000…..171,000………….$5,985
Total units……………...1,000….$233….$233,000…..197,000………….$6,895
Device ASP/ implied royalty %…$233…………………………………..3.0%
Alt 2
………………………….Units….ASP….. sales $
iPhone ASP……………..100….$600…..$ 60,000
Royalty Cap…………………….$260………………..$ 26,000………….$ 910
Other units………………900…..$190….$171,000…...171,000………….$5,985
Total units……………...1,000….$221….$221,.000....$197,000………….$6,895
Device ASP/ implied royalty % ..$221……………………………………..3.1%
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| To: engineer who wrote (122657) | 11/3/2014 4:13:35 PM | | From: Jon Koplik | | | | Wed. Nov. 5th Qualcomm earnings release and conf. call ...........................
Qualcomm Fourth Quarter and Fiscal 2014 Earnings Release
* The fourth quarter and fiscal 2014 earnings release will be issued on Wednesday, November 5, 2014 at approximately 4:00 PM (New York time.)
Qualcomm Conference Call
* Wednesday, November 5, 2014 from 4:45 PM to 5:45 PM (New York time.)
* To participate in the call, dial (866) 566-8589. International callers dial (706) 634-8091
* Please dial in ten minutes prior to the start time and use reservation number 20823606
* Live webcast available at qualcomm.com
Rebroadcast of Conference Call
* To hear the rebroadcast U.S. callers may dial (855) 859-2056 and international callers may dial (404) 537-3406. The rebroadcast will be available from November 5, 2014 beginning at approximately 8:45 PM through December 5, 2014
* Please use reservation number 20823606
* A replay of the webcast will also be made available at qualcomm.com shortly after the conclusion of the conference call.
Source :
Qualcomm Incorporated
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| From: Bill Wolf | 11/4/2014 7:43:02 AM | | | | | | Qualcomm FYQ4 On Tap: Bulls See Strength in iPhone, China Risk Priced In
By Tiernan Ray
Wireless chip titan Qualcomm ( QCOM) reports fiscal Q4 results after the bell this Wednesday, November 5th, the first quarter since the company on July 23rd beat Q3 expectations and raised its year outlook, but also disclosed it is struggling with some vendors in China who are refusing to pay for its technology.
This is also the first report since Apple’s ( AAPL) iPhone 6 was introduced last month, using Qualcomm parts, and the first report since a Samsung Electronics ( 005930KS) reported a decline in its Q3 mobile fortunes. Samsung is, like Apple, a major customer of Qualcomm’s.
The company continues to be under investigation by the Chinese government regarding its licensing business, which charges royalties for phones shipped that use technology for which Qualcomm holds patents.
The Street is modeling $7.04 billion in revenue and $1.32 in EPS. The outlook for the current quarter is pegged at $7.39 billion and $1.43.
Diving headfirst into the China issue, CLSA’s Srini Pajjuri reiterates an Outperform rating on Qualcomm stock, and a $90 price target, writing that he has “limited visibility” into China’s investigation, but that “even if we assume that China royalty revenue goes to zero, the stock is trading at 17x, suggesting that a near worst case scenario is priced in.”
Probably, the most prominent China OEMs have no problem with Qualcomm, he speculates: “we believe most top tier original equipment manufacturers (OEMs) in China such as Huawei, Lenovo, Xiaomi, Coolpad, and ZTE are complying.”
Qualcomm, he opines, is unlikely to agree to strip away royalty demands altogether. Rather, “We believe some combination of a lower rate, certain exclusions, and a fine is more likely.”
Probably, about $1 in EPS is at risk from those refusing in China to pay royalties, estimates Pajjuri:
We estimate the total made-in-China smartphone units to be about 640m in 2014. Excluding TD-SCDMA/2G, we believe Qualcomm’s addressable market is about 455m. Management’s CY14 device outlook assumes that the company won’t collect from about 215m devices. At around $8/device, we estimate that royalties from the remaining ~240m devices account for ~25% of QTL’s earnings or about $0.80-0.85 in EPS. For CY15, we believe $1.00 is a reasonable estimate, excluding which the stock is at 17x or 14.5x EV/FCF.
Pajjuri concludes while China is important, there are plenty of other growth areas for Qualcomm, and he doesn’t see a meaningful risk of spill-over into India, for example:
The primary spillover effect is in markets where Chinese manufacturers export to. In particular, Indian brands such as Micromax, Karbonn, and Lava primarily source from Chinese design houses such as Longcheer, Huaqin, and Tianno. We believe design houses are responsible for paying the royalties as Indian brands do not currently have a CDMA license. Of the 7 design houses we track in China, 2 of them do not appear to have a license. We also suspect underreporting is prevalent here as it’s difficult to track exact shipments.
Pajjuri is modeling $6.946 billion in revenue in Q4, and $1.28 in EPS. For the current quarter, he sees $7.492 billion and $1.50 per share.
Elsewhere, Cowen & Co.’s Timothy Arcuri reiterates an Outperform rating, and an $85 price target, writing that the stock “remains in a holding pattern pending NDRC investigation, and CQ4 Samsung inventory clear-out represents some near-term headwind for QCT,” but he still sees “risk- reward skewed to upside and see F2015 guide as likely good enough (despite the various QTL China challenges) given waning QCT concentration risk, solid double- digit TAM growth and a still-weak competitive landscape.”
Arcuri is modeling $7.01 billion and $1.35, based on shipments of 235 million chipsets, which is just above the low end of the 230 million to 245 million forecast the company offered. But, he writes, “we see potential for upside to both QCT units and margins given low bar to hit F2014 margin guidance (>20% exiting the year) and further LTE share gains in the quarter.” For this quarter, revenue may come in at only $7.32 billion, given chipset sales into Apple for the chipset division will be offset by inventory clearance of Samsung devices.
The licensing division may actually see a bright spot in that “we note December will be the first Q where QTL’s TAM guidance reflects the “potential” of China 4G, given China Mobile’s 4G LTE connection growth outpaced 3G TD-SCDMA.”
Also today, Ehud Gelblum with Citigroup reiterates a Buy rating, and an $88 price target, projecting $7.05 billion in revenue and EPS of $1.33, up from his prior estimate of $1.30, helped by “strong 4G uptake at China Mobile in CQ3, along with strong CQ3 growth at Apple.” Those positive trends caused Gelblum to raise his device shipment estimate above Qualcomm’s forecast, to 250 million.
Gelblum cut his estimate for pricing for Qualcomm, but he’s not changing any assumptions about licensing amidst the China stubble:
Our chip ASP falls to $19.2 from $19.6 to reflect the mix shift of lower ASP chips into CM. Our revised est’s also reflect an increase in our China Mobile LTE shipment forecast back to 80M for 2014 vs the 60M we had modeled after weak 4G LTE sub adds at CM in Q2. In Q3, CM 4G subs grew to 41M, an inflection point that we expect to benefit Qualcomm on the chipset side. Our QTL ests are untouched given the current underreporting issues in China.
Correction: A prior version of this post listed the wrong date for Qualcomm earnings. The report comes out Wednesday, after the close. My apologies for any confusion caused by the error.
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| From: qbull | 11/4/2014 9:53:49 AM | | | | | | QCOM Qualcomm: Updating model with slightly lower 3G/4G ASP assumptions; long-term thesis intact; Buy -- Canccord Genuity (77.47 -0.77)
Canccord Genuity's global smartphone surveys and recent earnings reports from leading handset/smartphone OEMs indicated global smartphone sales sequentially increased 8.5% during Q3/14. However, weaker sales of high-end Android smartphones due in part to consumers waiting for the upcoming iPhone 6 products adversely impacted Sept qtr 3G/4G device ASPs. Firm dowered Dec qtr and slightly lowered F2015/F2016 3G/4G QTL device ASP ests ahead of earnings. Firm believes co's QCT business remains well-positioned for strong growth trends due to ramping iPhone sales in the near term along with growing LTE device sales in China over the next several years.
QCOM is set to report tomorrow Nov 5 after the close
Read more: briefing.com |
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| From: Jim Mullens | 11/4/2014 10:17:17 AM | | | | | | Optimizing LTE Advanced for machine-type communications to connect the Internet of Everything
LTE MTC significantly increases battery life, reduces device complexity, and enhances coverage for low data rate machine-type communications.
Download the LTE MTC presentation
qualcomm.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Qualcomm® Gobi™ 3G and 4G M2M solutions
Proven global solutions supporting multiple carriers with multimode capability
Qualcomm Snapdragon and Qualcomm Gobi are products of Qualcomm Technologies, Inc. 1 As of September 2014
More than 175 3G/4G and Wi-Fi / HPGP modules and solutions from leading OEMs1
A partial list of cellular modules from various vendors is available at: www.m2msearch.com |
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| To: qbull who wrote (122663) | 11/4/2014 11:01:20 AM | | From: JeffreyHF | | | | | Canccord may be right, or they may be wrong, but when models are "adjusted" hours before the company reports and guides, it smacks of low hanging fruit on the trading tree. Feels like manipulation. |
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| To: JeffreyHF who wrote (122665) | 11/4/2014 11:40:49 AM | | From: Jeff Vayda | | | | | Standard try to flush out the weak hands prior to earnings. Although the volume is pretty heavy so at least it is not a string of 100 shares lots like we see post earnings in after hours. Just short term noise, nothing has altered the long term thesis or management so Im ahold'n. |
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| To: JeffreyHF who wrote (122665) | 11/4/2014 12:19:01 PM | | From: peterk | | | | | Jeff-you are probably right in your assessment, however QCOM faced a perfect storm this morning. Luke warm reports as you indicated, Nokia and Sprint getting hammered and the Q's stock being "manipulated below the 200 day MAV. |
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| From: Jim Mullens | 11/4/2014 2:04:38 PM | | | | | | Bye-Bye Wires- Qualcomm’s 11ad WiGig Platform Will Revolutionize In-Room Connectivity
The Online Reporter
Research, Trends and Insight into the Digital Media, Consumer Electronics & Broadband Industries
Bye-Bye Wires: Qualcomm’s 11ad WiGig Platform Will Revolutionize In-Room Connectivity
Tuesday, November 4th, 2014 • Related • Filed Under
Filed Under: Home Networking • OTT • UHD 4K
- Mobile & Stationary Devices Can Be Placed Anywhere in the Room…
– …And Connected to the TV by Pressing a Button
Imagine not having all the connecting wires behind the stack of entertainment devices under the TV set. In a new world that’ll start arriving next year, consumers will be able to place their mobile and stationary devices anywhere in a room that has a TV and stream flicker-free videos wirelessly. No wires will be needed between devices. Installations of equipment will be much easier and there’ll be fewer hairballs.
A new and different but very high-speed Wi-Fi technology is coming, called 11ad or WiGig. It’s capable of speeds up to 7 Gbps — yes, Gigabits, not Megabits. WiGig is an in-room network technology, as opposed to a whole home technology such as the 11ac, 11n and prior versions of Wi-Fi. Over time it’ll replace the wires that connect the TV set to devices such as the pay TV companies’ STB, the Blu-ray player, gaming consoles and streaming media devices.
11ad will radically simplify the way consumers connect their entertainment devices to the TV set and even allow smartphone and tablets to stream data-rich UHD videos to a UHD TV or HD videos to an HD TV. Both sending and receiving devices will need the 11ad technology but in many cases that could come in the form of an 11ad dongle that plugs into the TV and serves as the receiver.
Dell’s 11ad/Wi-Gig Docking Stations
How close is 11ad to being available? Qualcomm Atheros (QCA) has the jump on other chip makers. It is already shipping 11ad chips and Dell already has put its 11ad chips in a laptop — the Dell Latitude 6430u laptop, which is available now along with an 11ad docking station for the desktop or server.
QCA has been demonstrating prototypes of smartphones and Android tablets that’ll have 11ad integrated in Qualcomm’s Snapdragon 810 processors. Two weeks ago in New York it showed 11ad models of the Sony Xperia Z3, the new Moto X, Samsung Galaxy Note 4, LG G3, OnePlus One and several other smartphones. Two tablets were wirelessly connected to each other and one tablet was receiving a 4K stream that was stored on the other tablet.
In addition to streaming 4K and HD videos, 11ad can also be used for peer-to-peer content sharing, networking, wireless docking and backing up entire media libraries in seconds.
QCA expects 11ad capable smartphone and tablets to be available in 2015, according to Tal Tamir, Qualcomm’s VP of product management for the mobile, computing and location business unit. He said 11ad is a completed IEEE standard and the Wi-Fi Alliance conducts certifications. Tamir said that 11ad will also be used as part of the Internet-of-Things because homes will eventually have 20 or more sensors, some of which need quick Internet access and others that will need lots of bandwidth such as medical monitoring.
The Wi-Fi Alliance confirmed that 11ad devices will become available in 2016 and says they will be capable of delivering “multi-gigabit speeds, low latency, and security-protected connectivity between nearby devices.” It lists as applications: cable replacement for I/O and display extensions, wireless docking between devices like laptops and tablets, instant sync and backup and simultaneous streaming of multiple, ultra-high definition and 4K videos.
Dell said its Wireless D5000 is the world’s first commercially available 11ad dock. In addition to 11ad, it also supports multiple screens, USB 3.0 and has an audio output. The Dell laptop connects to the PC via the D5000 dock by the user pressing a pairing button and then hitting connect in Dell’s Connection Manager software.
Samsung is a large producer of devices that will need 11ad chips: TVs, mobile phones, tablets, Blu-ray players and the like. It has said it intends to produce 11ad chips. Qualcomm’s very public displays of devices with 11ad chips and the fact that it is shipping 11ad chips seems to have Samsung so concerned that it recently preannounced its 11ad chips and did so in a manner that lead some people to think it’s a proprietary Samsung technology, which it isn’t.
The Wilocity Connection
Qualcomm accelerated its entry into the 11ad chip market by acquiring Wilocity, which had been the early leader in the development of 60 GHz wireless chipsets based on the IEEE 802.11ad standard, also known as WiGig.
Qualcomm has gone beyond 11ad by incorporating its 11ac and 11ad technology into what it calls a tri-band (triple band) platform that’s capable of concurrently supporting Wi-Fi’s three bands: 60 GHz for 11ad, 5 GHz for 11ac and 2.4 GHz for 11n. In combination, it said, 11ad and 11ac “create the most powerful and efficient wireless solution in the market; coupling the whole home coverage of 11ac with the in-area multi-gigabit connectivity of 11ad.” Its initial tri-band platform is a reference design based on the Qualcomm’s Snapdragon 810 processor, which it says is “the world’s first mobile platform designed to support WiGig to enable applications such as 4k video streaming.”
Qualcomm said that by integrating 11ad into its mobile platforms, mobile devices will have near-instantaneous access to the cloud and allow for greater offloads from the cellular network to Wi-Fi networks. That’ll be useful if and when the industry moves to a “Wi-Fi First” protocol in which mobile devices first look for available Wi-Fi networks before connecting to a cellular network. It is a strategy that the cablecos seem to be pursuing with their growing network of hotspots and homespots that their subscribers can access for free.
At the time that Qualcomm announced it had acquired Wilocity, the then president of Qualcomm Atheros Amir Faintuch said, “WiGig will …
http://www.onlinereporter.com/2014/11/04/bye-bye-wires-qualcomms-11ad-wigig-platform-will-revolutionize-in-room-connectivity/
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