bill davidson sr. vp firethorn mobile, inc., sales and...
TRANSCRIPT
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25th Annual Roth Conference March 19, 2013
Bill Davidson
Sr. VP Firethorn Mobile, Inc., Sales and Marketing
and Qualcomm Investor Relations
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Safe Harbor and corporate structure In addition to the historical information contained herein, this presentation contains forward-looking statements that are inherently subject to risks and uncertainties, including but not limited to statements regarding our our fiscal 2013 outlook, including revenue and EPS targets; continued adoption of smartphones and connected devices; forecasted smartphone shipments and sales; 3G and 3G/4G growth in emerging regions; 3G/LTE adoption; increased device capabilities; 3G/4G device average selling prices; estimated 3G/4G replacement rates; key initiatives for the Company’s growth; expanding areas for smartphone innovation; new mobile computing growth opportunities; mobile data traffic growth; and growth in small cell deployment. Forward-looking statements are generally identified by words such as “estimates,” “guidance” and similar expressions. Actual results may differ materially from those referred to in the forward-looking statements due to a number of important factors, including but not limited to risks associated with the commercial deployment of our technologies and our customers’ and licensees’ sales of equipment, products and services based on these technologies; competition; our dependence on a small number of customers and licensees; attacks on our licensing business model; our dependence on third-party suppliers; the enforcement and protection of our intellectual property rights; claims by third parties that we infringe their intellectual property; global economic conditions that impact the communications industry and the potential impact on demand for our products and our customers’ and licensees’ products; our stock price and earnings volatility; strategic transactions and investments; foreign currency fluctuations; and failures, defects or errors in our products and services or in the products of our customers and licensees. These and other risks are set forth in our most recent Form 10-K and Form 10-Q filed with the SEC, copies of which are available on our website at www.qualcomm.com. We undertake no obligation to update any forward-looking statements.
Throughout today’s presentations we refer to “Qualcomm” for ease of reference. However, please note that in connection with our recent reorganization, Qualcomm Incorporated continues to operate QTL and own the vast majority of our patent portfolio, while Qualcomm Technologies, Inc., its wholly-owned subsidiary, now operates, along with its subsidiaries, substantially all of our products and services businesses, including QCT, and substantially all of our research and development functions.
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Qualcomm’s unique business model A technology enabler for the entire mobile value chain
SUBSCRIBERS WIRELESS
ECOSYSTEM
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Qualcomm: a communications systems company Innovation across entire wireless value chain
Standardization Innovative technologies Productization Commercialization
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$0.025 $0.035
$0.05 $0.07
$0.09
$0.12 $0.14
$0.16 $0.17
$0.19
$0.215
$0.25
$0.35
Feb '03 Jul '03 Mar '04 Jul '04 Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 Mar'11 Mar'12 Mar'13
Quarterly dividend increased by 40% Record $1.40 per share annualized payout
40% Increase, Board
Approved*
Qu
art
erl
y d
ivid
en
d p
er
sh
are
**
Note: The Company effected a two-for-one stock split in August 2004. All references to per share data have been adjusted to refl ect the stock split.
*As of March 5, 2013
**Based on announcement date of increase
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FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 YTD**
Cumulative return of capital to stockholders New $5 billion stock repurchase program*
$19.9B** Returned to stockholders
Stock repurchases
Cash dividends
*Announced March 5, 2013
**As of December 30, 2012
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Continued adoption of smartphones
Growth of 3G in emerging regions
QCT:
− Technology leadership
− Roadmap breadth and depth
− New computing and connectivity opportunities
QTL: Industry-leading licensing program
Double-digit revenue and EPS CAGR targets
over the next five years*
~27% pre-revenue R&D**
Fiscal 2013 Outlook
*Estimates as of November 15, 2012 for the five year period from FY’12-FY’17
**Estimates as of November 15, 2012
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$194 $192 $205 $215 $214 $214 $219 $205
$186 $206
$219 $220
$-
$100
$200
$300
$400
$500
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13e
3G/4G estimated wholesale device midpoint ASP trend(1)(2)
Learning curves
’97–’13 est. 85%
’99–’13 est. 96%
’07–’13 est. 99%
Fiscal years
Midpoint of $214–$226*
estimate for FY’13
*Guidance as of November 7, 2012.
(1) and (2) See notes included at the end of the presentation.
Voice
• Transition to data
• Ramp in WCDMA and EV-DO
• Significant growth in emerging
regions
• DOrA, HSPA+
• Increased device
capabilities
• 2G to 3G migration
• Growth in smartphones &
connected devices
• 3G/LTE adoption
• Increased device capabilities;
memory, display, camera...
Voice/data transition Voice & enhanced data Smartphones
• Voice-centric devices
• Growth in CDMA 2000
• Focus on developed
regions
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3G/4G estimated wholesale device average selling price(1)(2)
Qualcomm’s long-term plan* is based upon an average annual low single-digit % decline of
device average selling price
Multi-year
Developed device ASP
Multi-year
Emerging device ASP
Smartphone capabilities/features
Smartphone penetration
Feature phones in decline
Competition
Emerging regions growing faster
than developed regions
Upward pressure on 2012-2013
ASP as mix shifts from dongles to tablets
Handset ASPs
Non-handset ASPs
*As of November 15, 2012
(1) and (2) See notes included at the end of the presentation.
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Key initiatives for sustained, long-term growth Qualcomm innovations underpin industry dynamics
Drive smartphone
growth and innovation
Create new
mobile computing
opportunities
Solve the 1000x
data challenge Enable growth
in emerging regions
Deliver the Internet
of Everything
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Our most important device Immediacy, portability, connectedness
Source: Google/Sterling Brands/Ipsos Multi-Screen Research, Aug. ’12
1/3+ of daily media interactions occur
on a smartphone
~1/2 of smartphone owners use them
while watching TV
4/5 of all searches on a smartphone
are spontaneous, compared to 52% on PC
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2011 2012 2013 2014 2015 2016
Annual forecasted smartphone unit shipments
24% CAGR 2011–2016
Continued smartphone momentum Displacing feature phones
Cumulative smartphone unit sales
forecast between 2012–2016 ~5B Source: Average of Gartner, Oct. ’12; Strategy Analytics, Aug. ’12
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Expanding areas for smartphone innovation
GPU
CPU
DSP/Multimedia
Sensors
Connectivity
Displays
Modems
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GPU
Expanding areas for smartphone innovation
2MB L2 (8064 only) aSMP Custom krait Web Tech innovations High performance floating point Custom system interconnect
FlexRenderTM technology GPGPU compute for imaging/video (Renderscript, OpenCL, LLVM) Unified shader architecture Low power innovations Stereoscopic rendering Accelerated WebGL Profiling tools
21 MPix 20x digital zoom Zero shutter lag Ultrasound 7.1 surround playback 5.1 surround camcorder
Stereo 3D video 1080p HD video Browser with HTML5 and 1080p flash Computational camera Noise cancellation
LTE world mode LTE broadcast
LTE TDD RF multi-band
TD-SCDMA
Coexistence with connectivity VoLTE/SRVCC
Advanced receivers Power optimization
BT Miracast
Multiband FM
Coexistence with WWAN Indoor location
GPS/GNSS .11ac
Temperature Gyroscope IR sensing Humidity
Magnetometer
Accelerometer Proximity Pressure
Ambient light Gestures
3D Wireless display
MEMS
Color correction Content adaptive backlight Frame buffer compression
Sensors
Connectivity
Displays
Modems CPU
DSP/Multimedia
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Qualcomm Snapdragon processor leadership
*Includes Qualcomm reference design
Source: Qualcomm data
85+ manufacturers shipping
550+ designs in development*
770+ devices announced*
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Snapdragon Processors
Snapdragon 800
Premium smartphones, Smart
TVs, digital media adapters
and tablets.
Snapdragon 600
Mid-high tier smartphones
and tablets.
Snapdragon 400
High volume smartphones
and tablets.
Snapdragon 200
Entry level smartphones.
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Mobile is redefining computing
High resolution screens Responsive devices
Fast, always-on connectivity Rich multimedia experience
High performance computing
Sleek, ultra-light
Longer battery life
Thermal efficiency
Without compromising mobility
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New mobile computing growth opportunities Tablets to lead growth of new generation of mobile computing devices
41% CAGR (2011-2016)
Tablets: Average of Gartner, Dec. ’12; Strategy Analytics, Jan. ’12;
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3G/4G growth in emerging regions
2.7B
2011 2016
3G/4G Connections
0.8B
Source: Wireless Intelligence, Nov. ’12
+255% Expected growth
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Qualcomm reference designs Accelerating global growth of 3G smartphones
Source: Qualcomm data
170+ devices launched
13 countries
40+ OEMs
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~2x from 2010–2011*
Mobile data traffic growth
Network efficiency Small cells More spectrum
Source: Cisco, Feb ‘11
Global data traffic growth
1000x data traffic growth
Preparing for
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Qualcomm LTE leadership and scale
Source: Qualcomm data
700+ LTE OEM devices based on Qualcomm LTE chips:
300+ OEM LTE devices accepted by carriers
400+ more OEM LTE designs in the pipeline
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Connectivity Wi-Fi BT GPS
The unique Qualcomm advantage Hiding the complexity underneath the most seamless mobile connectivity
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35 36 37 38
39 40 41 42 43 1 2 8 3 4 5 6 9
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7 10 11 12
13 14 17 44 18
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26 Radio Frequency Bands
GERAN CDMA 1x UMTS TD-SCDMA LTE TDD/FDD EV-DO
LTE
2G/3G
System Selection
Blind Redirection
Redirection w/ Measurements
Reselection
PS Handover
CS Fallback
CSFB w/ SI Tunneling
Single Radio VCC
Handover Techniques (Multiple Can Apply in Each Case) Handover Combinations (Hypothetical Examples)
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Qualcomm RF360 Front End Solution The First Truly Global Solution for 4G LTE Devices
Single SKU
Power
Performance
Size
Time to market
Advantages
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Internet of everything Everything around us is becoming intelligent & connected
Health &
fitness
Automotive Industrial
Home
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Key initiatives for sustained, long-term growth Qualcomm innovations underpin industry dynamics
Drive smartphone
growth and innovation
Create new
mobile computing
opportunities
Solve the 1000x
data challenge
Technology leadership and financial strength
Enable growth
in emerging regions
Deliver the Internet
of Everything
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Footnotes
1. Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based, OFDMA-based and
multimode CDMA/OFDMA subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular
period (collectively, “3G/4G devices”). The reported quarterly estimated ranges of ASPs and unit shipments are determined based on the information as reported
to us by our licensees during the relevant period and our own estimates of the selling prices and unit shipments for licensees that do not provide such
information. Not all licensees report sales, selling prices and/or unit shipments the same way (e.g., some licensees report selling prices net of permitted
deductions, such as transportation, insurance and packing costs, while other licensees report selling prices and then identify the amount of permitted deductions
in their reports), and the way in which licensees report such information may change from time to time. Total reported device sales, estimated unit shipments and
estimated ASPs for a particular period may include prior period activity that was not reported by the licensee until such particular period.
2. The midpoints of the estimated ranges are identified for comparison purposes only and do not indicate a higher degree of confidence in the midpoints.
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For more information on Qualcomm, visit us at:
www.qualcomm.com & www.qualcomm.com/blog
Qualcomm is a trademark of Qualcomm Incorporated, registered in the United States and other countries.
Other products and brand names may be trademarks or registered trademarks of their respective owners
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