dwdkc, Re: GSM1x handset sales potential impact on QCOM 2004 EPS-
As you can imagine, there are a number of variables involved- the ASP of the handsets and chipset being the most important. Qualcomm should have 100% market share of the chipset going into the handset. Based on sales of 10 million GSM1 handsets, approximately 13 cents would be added to the EPS. This is based upon my modeling of 2004 in total. Most of the GSM1x sales would be in China with lower royalty rates, however this should be off-set by higher than average ASPs for initial sales of both the MSM6300 chipset and GSM1x handset. Qualcomm may wish to aggressively attack the market and price the chipset accordingly which could also lower the handset ASP and therefore reduce EPS.
Estimating 2004 EPS is not an easy task given the number of variables. –
- CDMA2000 chipset market share- 2003 was exceptionally high and should decline (NOK)
- CDMA chipset ASPs may drop due to increased competition mainly from NOKs added competition.
- CDMA handset ASPs held up incredibly well in 2003 and may decline more than normal due to NOK competition and also increased sales to developing countries (India, China, SE Asia) which may be proportionally larger than sales if high tier/ feature rich phones.
- New revenue streams should add additional EPS- BREW, CDMA Modules-M2M/ gpsOne, Qchat
- Number portability in the U.S. may spur significant increased handset sales.
- WCDMA uptake spurred by “3” in Europe and DoCoMo in Japan may also surprise.
Next weeks CC and the London Day presentation the following week should be very interesting, as well as the investment communities’ reaction to it. Hopefully, the growth of 3G (WCDMA and CDMA2000) beginning in the 2nd half of 2004 and the hockey stick ramp beginning in 2005 will be emphasized and that will finally become the prominent thinking within the “analyst” community.
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