Forbes reported today that Qualcomm was downgraded by a stock market analyst because: “We see limited upside to our already optimistic forecasts for WCDMA adoption and handset growth". Do you believe this, despite the large installed base of GSM handsets? What are the other options for GSM providers? Do you think GSM providers are going to bypass WCDMA? Do you think that this gives CDMA-based carriers an edge in the market?
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Qualcomm, WCDMA, CDMA, GSM
2 comments:
Actually, this article is not very clear about what exactly they mean by "outperform" vs "neutral".
The analyst says "We see limited upside to our already optimistic forecasts for WCDMA adoption and handset growth". So it appears that they are already optimistic about WCDMA adoption :-). It would appear that GSM subscribers have stopped migration to WCDMA or are thinking of alternatives if the WCDMA adoption was pessimistic perhaps. Also, there is a blurb about additional 3G subscribers in Japan. Moreover, I believe cdma2000 handset makers also have to pay Qualcomm royalty.
In summary, I would simply read it as GSM providers will move to WCDMA, but perhaps not at a rate that warrants a huge growth for Qualcomm.
"Neutral" means that it will track the S&P500, and outperform means better than that. I read the "optimistic" comment differently ... that their forecast was optimistic rather than conservative. On review, the analyst seems to adjusted his expectations on handset growth downwards, hence the adjustment to Qualcomm's financial outlook.
You are right, on royalties ... Qualcomm benefits from both CDMA 2000 and WCDMA .
I agree with your summation in any case ...
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