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Intel Corporation Message Board

  • paul.ottelini paul.ottelini May 11, 2013 7:28 PM Flag

    Qualcomm expected to grow while Apple shrinks its earnings?

    Did anybody notice that expectations for Qualcomm is for them to grow their earnings by 32% in 2 years while Apple is actually expected to slightly shrink its earnings?
    I believe Qualcomms market share of selling chips is alot more at risk due to Intel and Google working together than it is for Apple to lose market share.

    Sentiment: Strong Buy

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    • Examine the sources of QCOM revenues.
      Top of page 4 of their March 2013 10q SEC filing.

      Quarterly revenues from Licensing is $2.134 billion.
      Quarterly operating income is $1.877 billion.
      Same for last quarter, quarter before that, annually, .... licensing revenue exceeds their operating profit.

      From 50,000 feet up, it looks to me like QCOM is getting more licensing revenues than their profit. How much increment expenses are added by the licensing organization over not licensing at all? Not much. The gross margin of their licensing revenue is 99.9%.

      If you extracted the QCOM $2.134 billion licensing revenue from their profits, wouldn't their operating income be negative?

      With the world tilting toward 4G, guess where the 32% earnings is going to come from.

      QCOM is primarily an intellectual property company who makes and sells some chips below cost. ARMH with a US tattoo.

      Are these calculations correct?

 
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