QCOM Analyst Day notes continued- Dr. S Jha
1. Success in the Face of Competition-
.......This one chart IMO succinctly addresses the “analysts” concerns regarding the Q’s ability to compete in the wireless chipset market.
...QCT
......+ Broadest product offering
......+ Largest customer base
......+ Unmatched execution
......+ Highest integration
......+ All wireless standards
...Partners Success ( how QCT enables their partners to now effectively compete )
.....+ Gaining market share - the most advanced , segmented chipsets supporting ALL wireless standards
.....+ Early to market with
..............1xEV-DO
...............WCDMA
...............Integrated cameras and video
.....+ Expanding addressable market-
..............Emerging markets
..............WCDMA
..............Multimedia
2. QCT Chipset and Revenue Trend (FY’98 – ’04 est)
........MSM shipments- 5 yr 41% CAGR
........QCT Revenue- 5 yr CAGR 22%
3. Sustained Financial Performance Supports R&D Growth (Fy’98 – ’04 est)
........QCT Operating Profit- 5 yr avg @ 31%
........QCT R&D Spending- 5 yr CAGR @ 45%
4. Sourcing Strategy- Wafer Demand vs. Supply
........Quarterly comparison- Oct 03 thru Current Update (gap is narrowing)
5. Global CDMA Wireless- Growth Drivers
.......1.8B voice users – 2005
.......1.0+B data users – 2007
.......0.6B Multimedia & Mobility (MM) users – 2006 (location/ mobility/ audio, camera, video, gaming)
6. CDMA2000 / WCDMA Dominate as Wireless Moves to Data- Cellular Handset Semi Revenue
........CDMA based rev overwhelmingly outpaces other tech - $5+B 2003 to $25B 2008
7. Feature Integration- revenue growth by category 2003 thru 2008
........$20B 2003 growing to $35+B 2008
...........Baseband
...........Radio
...........Flash Memory
...........PSRAM/MDRAM
...........Apps Processor & MM Coprocessor
...........Image Sensor & Processor
8. Our Winning Approach-
8. A. Integration- Modems and Applications
...........Chart with photo of front and back of MSM5500 (EV-DO) and MSM6100 (1x)
..............MSM6100 integration gains-
.................+ BB with integrated co-processor
.................+ BB w/co-processor, Pwr Mgmt, RF, Memory- all on one side of board (space savingings)
8.B. Roadmap- 4 distinct chipset platforms, broadest possible segmentation (sampling dates)
........’02- ’03: Value Platform.....................{ 120+ Designs
........’03- ’04: Multimedia Platform..........{
........’04- ’05: Enhanced Platform
........’05- ’06: Convergence Platform
...........................Dual CPU
...........................6.0 megapixel digital camera
...........................30 fps digital video record & playback
...........................4M triangles/ sec 3D graphics acceleration
...........................High- fidelity digital stereo audio record/ playback
........The WCDMA Roadmap- 6 chipsets
8.C. QCT Enables Customers and Devices-
.............50+ customers
.............400+ handsets (and counting)
8.D. Carrier Relations
.............80+ 3G carriers launched worldwide
8.E. QCT Continues to Execute
..........Reduce Cost for Wireless
..........Make Multimedia Mainstream
..........Roll-out WCDMA, Gain Traction
..........Define Next-Generation Devices- personalized consumer electronics devices
.........All designed to drive the handset replacement market
8.E.1 Making Multimedia Mainstream
............Shipping first highly integrated multimedia platform for wireless devices
................MSM 6100, 6250, 6300, 6500 - common feature set across multiple modes
............30+ New Qtv design wins
............15+ QCamera design wins
............55+ Million CMX devices
8.E.2. WCDMA Traction
..............WCDMA Customers- 21 total
.................China- 4
.................Europe- 3
.................Japan- 4
.................Korea- 4
.................Taiwan- 4
.................USA- 2
.............10 Models expected to launch by year-end (MSM 6200, 6250)
8.E.2.a. WCDMA Competitive Analysis-
.................Total eBOM Part Count (electronic parts)- MSM6250 significantly lower than competition
.................Major Chip Count
...................MSM 6250 = 6 major chips
...................Comp-
......................A = 9
.....................B = 8
.....................C1 = 9
.....................C2 = 10
.....................D = 11
.....................E = 8
8.E.2.b WCDMA Competitive Analysis- Digital baseband die photos
...............shows photos of relative die area of MSM6250 vs the same competitors chipsets
...............MSM6250 = 72.3mm^2 vs competition at 75.2mm^2 to 141.6mm^2
8.E.2.c WCDMA Initiatives
................Immediate Priorities
...................MSM6200 Launches- 10+ devices
...................MSM6250 Launches
........................18 Customers
.........................Apps, modem IOT
................New Developments
...................1. HSPDA
...........................MSM6275 @ 1.8Mbps (Q4 ’04)
...........................MSM6280 @ 7.2Mbps (2H ’05)
...........................RFT/RTR6275: WCDMA/EGRPS radio integration
...................2. Entry-tier
...........................MSM6225: speeds WCDMA adoption thru greater segmentation
8.F. Next generation Devices- Convergence Platform
............The Portable Wireless Media Center-
..............GPS
.............3D Graphics
.............Video Playback
.............Modem
.............Security
.............Imaging and Video
.............Audio Processing
.............TV interface
.............High Speed Serial Interface
Dr. Jha went into considerable and exhaustive detail in enumerating the Q’s strengths in all of these areas, yet one of the questions in the first Q&A round as I recall came from a verbose skeptic questioning how the Q could possibly compete against the traditional GSM dominated market TI ( ref- TI – LG WCDMA win / and with the European carriers). I recall Dr. Jha stating the same skepticism prevailed in the days preceding last years Analyst Day due to the perceived NOK3 threat, yet “the consortium has yet to release a commercial product.”
In response to achieving their stated 50% WCDMA chipset market share, Dr. Jha stated their goal was to achieve “good market share” , but that the 50% share was not likely within the next two years. Dr. IMJ responded questioning how many over time will continue to expend the R&D to “keep up with Qualcomm” and that the field producing WCDMA chipsets would thus narrow over time.
Surprisingly, I think there are still a number of “analysts” that are not seeing the big picture- focusing on the trees and not seeing the forest. The Q’s new addressable market is the total mobile wireless world, expanding from the 13-20% CDMA niche to virtually 100% of 600 to 800 million handset sales per year.
Irregardless of the WCDMA chipset share (30% to 50%), selling into the previous prohibited GSM market represents huge growth revenue / EPS gains for the Q in just this new and virtually guaranteed royalty revenue stream with 90%+ Operating Margin.
FWIW, an independent research group gets it, writing these statements (re: WCDMA) after viewing the presentation . –
...”We believe Qualcomm provided convincing evidence that they have created the technology, enlisted the equipment vendors, and sold the carriers on their network approach “....”(WCDMA chipset market) ...55% -70% is achievable”
Dr. Paul Jacobs enthusiastic presentation to follow-
AI
