qualcomm analyst day
TRANSCRIPT
Qualcomm Analyst Day NOVEMBER 15, 2012
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Safe Harbor, Regulation G 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 financial and business guidance, estimates and outlook; industry trends and forecasts; our growth initiatives; business and growth opportunities, and our positioning to take advantage of those opportunities; our product roadmap, and future products, features and functionality. 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, including current and future legal proceedings and actions of governmental or quasi-governmental bodies; our dependence on third-party suppliers, including the potential impact of supply constraints; 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; the commercial success of our QMT division’s display technology; 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 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.
This presentation includes a discussion of “non-GAAP financial measures” as that term is defined in Regulation G. The most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company’s financial results prepared in accordance with GAAP have been included at the end of this presentation.
Throughout today’s presentations we refer to “Qualcomm” for ease of reference. However, please recall 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 substantially all of our products and services businesses, including QCT, and substantially all of our research and development functions.
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9:10AM: Paul Jacobs
10:10AM: Steve Mollenkopf
11:00AM: Lunch Break
11:30AM: Derek Aberle
12:00PM: Bill Keitel
12:30PM: Q&A
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Dr. Paul E. Jacobs CHAIRMAN AND CEO
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Record revenues and earnings
Record QCT MSM chip shipments
Record 3G/4G device shipments by QTL licensees
Continued investment in technology leadership
Positioned well for trends in the mobile wireless industry
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Cumulative $19.5 Billion* Returned to Stockholders
STOCK REPURCHASES DIVIDENDS PAID
FISCAL 2012
STOCK REPURCHASES DIVIDENDS PAID DIVIDENDS PAID PER SHARE
REMAINS AVAILABLE FOR REPURCHASE UNDER CURRENT BOARD AUTHORIZATION
CUMULATIVE SINCE 2003
*As of November 7, 2012
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FY’05 FY’13e*
$5.7B
~$23B - $24B
Revenues
Growth Since 2005
Jul’05 Nov’12
~$55B
~$100B
Market Cap
FY’05 FY’13e
$1.26
~$3.40-$3.60
EPS (GAAP)
Jun’05 Sep’12
$7.9B
$26.8B
Cash & Marketable Securities
*Guidance as of November 7, 2012; % growth for FY’13 guidance presented at the midpoint
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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*
*Estimates as of November 15, 2012
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Wafer Supply
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Evolving Industry Dynamics
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Qualcomm: A Communications Systems Company INNOVATION ACROSS ENTIRE WIRELESS VALUE CHAIN
Innovative Technologies
Standardization Productization Commercialization
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Key Industry Trends
Computing Redefined Unprecedented Data Demand Digital 6th Sense
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Key Initiatives for Sustained, Long-Term Growth QUALCOMM INNOVATIONS UNDERPIN INDUSTRY DYNAMICS
Drive Smartphone Growth and Innovation
Solve the 1000x Data Challenge
Enable Growth in Emerging
Regions
Create New Mobile Computing
Opportunities
Deliver the Internet of Everything
Drive Smartphone Growth and Innovation
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Our Most Important Device IMMEDIACY, PORTABILITY, CONNECTEDNESS
of all searches on a smartphone are spontaneous, compared to
52% on PC
of daily media interactions occur on a smartphone
of smartphone owners use them while watching TV
Source: Google/Sterling Brands/Ipsos Multi-Screen Research, Aug. ’12
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2011 2012 2013 2014 2015 2016
Annual Forecasted Smartphone Unit Shipments 2011–2016
Continued Smartphone Momentum DISPLACING FEATURE PHONES
CUMULATIVE SMARTPHONE UNIT SALES FORECAST BETWEEN 2012–2016
Source: Average of Gartner, Oct. ’12; Strategy Analytics, Aug. ’12
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One Device, Many Functions DRIVING SMARTPHONE REPLACEMENT CYCLE
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Expanding Areas for Smartphone Innovation
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Expanding Areas for Smartphone Innovation
aSMP
High Performance Floating Point
Custom Krait 2MB L2 (8064 only)
Web Tech Innovations
Custom System Interconnect
Low Power Innovations
Profiling Tools
GPGPU Compute for Imaging/Video (Renderscript, OpenCL, LLVM)
Stereoscopic Rendering
FlexRender™ Technology
Unified Shader Architecture
Accelerated WebGL
Ultrasound
1080P HD video
Stereo 3D video
21 MPix 7.1 Surround Playback
5.1 Surround Camcorder Noise cancellation
Zero Shutter Lag
Browser with HTML5 and 1080p Flash
20x Digital zoom
Computational Camera
TD-SCDMA
VoLTE / SRVCC
Power Optimization Advanced Receivers
RF Multi-band
LTE TDD LTE World Mode LTE Broadcast
.11ac
Indoor Location
Multiband FM
BT GPS/GNSS Miracast
Accelerometer
Temperature Magnetometer Gyroscope
Ambient light Proximity
Pressure Gestures
IR Sensing Humidity
MEMS
Color correction
Content Adaptive Backlight
Frame Buffer Compression
3D
Wireless Display
Coexistence with connectivity
Coexistence with WWAN
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Create New Mobile Computing Opportunities
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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
Mobile is Redefining Computing
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Snapdragon Across a Range of Devices
Afterburn
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Computing Growth Opportunities TABLETS TO LEAD GROWTH OF NEW GENERATION OF MOBILE COMPUTING DEVICES
Tablets: Average of Gartner, Sep. ’12; Strategy Analytics, Sep. ’12; Mobile PCs: Average of Gartner, Sep. ’12; IDC, Aug. ’12
CAGR (2011–2016) CAGR (2011–2016)
Tablets and Laptops Estimated to be Sold in 2016
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Connectivity is Key in New Mobile Computing Devices EMBEDDED AND EXTERNAL MOBILE BROADBAND IN NEW MOBILE COMPUTING DEVICES
Growth in unit shipments 2011–2016
Dongle & MiFi: Gartner, Oct. ’12; ABI, Oct. ’12; Embedded M-PCs: Average of Aug. ’12; SA, Jul. ’12 Gartner, Sep. ’12; Tablets: Average of SA, Sept. ’12; Gartner, Sep. ’12
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Flexible Data Plans to Support Continued Growth NEW AND INNOVATIVE DATA PLANS
Chromebook
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Uniquely Positioned to Address the Growing Opportunity
Integrated AP/ Modem/Connectivity
APQ Processors
3G/LTE Modem
Connectivity
Enable Growth in Emerging Regions
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Emerging Regions Lead Mobile Usage Across Many Categories
Source: TIME Mobility Poll, conducted in cooperation with Qualcomm
China 86%
India 87%
China 76%
China 84% India
77% India 70%
India 62%
India 65%
China 78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Surf Internet Music Web Search News Take Photos E-mail Social Networks Games Weather
% Surveyed That Use Their Mobile Device a Few Times a Week to Perform Each Task
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3G/4G Growth in Emerging Regions
EXPECTED GROWTH
2.7B
2011 2016
3G/4G Connections
0.8B
Source: Wireless Intelligence, Nov. ’12
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Ramping 3G/4G Growth in Emerging Regions FORECASTED 3G/4G CONNECTION GROWTH BETWEEN 2011-2016
LatAm India
China MEA
Source: Wireless Intelligence, Nov. ’12
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Advanced Network Deployments in Emerging Regions
HSPA+ LTE DC-HSPA+
NETWORKS
DO-Rev. A
Source: CDG, Nov. ’12; GSA, Jul./Nov. ’12
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China 34% SMARTPHONE SHIPMENT CAGR FORECAST FROM 2011–2016
Source: Gartner, Jun. ’12
Affordable smartphone initiatives
Vibrant ecosystem
Increased data traffic
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Latin America 27% SMARTPHONE SHIPMENT CAGR FORECAST FROM 2011–2016
Source: Gartner, Jun. ’12
LTE Network launches and spectrum opportunities
Strengthening Brazilian ecosystem
Push-to-Talk
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India 39% SMARTPHONE SHIPMENT CAGR FORECAST FROM 2011–2016
Source: Gartner, Jun. ’12
Affordable 3G Services
Mobile web browsing users surpassed fixed
BWA spectrum
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Expanding Diversity of Affordable Smartphones >800M SMARTPHONE SHIPMENTS FORECAST IN EMERGING REGIONS IN 2016
India Latin America SE Asia Africa
China
Source: Average of Gartner, Oct. ’12; Strategy Analytics, Aug. ’12
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Qualcomm Reference Designs ACCELERATING GLOBAL GROWTH OF 3G SMARTPHONES
Source: Qualcomm data
OEMs Device Launches Countries
Solve the 1000x Data Challenge
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GLOBAL DATA TRAFFIC GROWTH
FROM 2010–2011*
Mobile Data Traffic Growth
*Source: Cisco, Feb. ’11
PREPARING FOR
DATA TRAFFIC GROWTH
Network Efficiency Small Cells More Spectrum
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Wi-Fi Offload Complements Cellular Infrastructure
Passpoint (Hot Spot 2.0)
802.11ac
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Improving Network Efficiency
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LTE Broadcast Enables Efficient and High Quality Delivery of Media
LTE
Notes: HSPA+ Advanced example, compared to HSPA+ R7/R8. Less resources to discover proximal devices within 20s in a cell with 800 users, vs. regular LTE. Can also discover 16x more devices than Wi-Fi Direct
LTE Broadcast
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LTE Carrier #5
LTE Carrier #4
LTE Carrier #3
LTE Carrier #2
LTE Carrier #1
Aggregated Data Pipe
Carrier Aggregation Leverages All Spectrum Assets
Aggregation within band e.g. 2.6 GHz
10 MHz
Supplemental Downlink
e.g. 700MHz
10 MHz
Enhances User Experience Higher Data Rates Leverages All Spectrum Assets
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Demand Driving Extreme Densification
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Small Cells Everywhere LOW COST, SMALL SIZE AND EASE OF DEPLOYMENT
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Indoor Cells Provide Outdoor Coverage
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Even Low Small Cell Penetration Provides Good Performance
Low Transmit Power Sufficient* Gain Not Sensitive to External Wall Loss
2% Household Penetration, Neighborhood Small Cells
5% 20%
Offloaded Offloaded
Offloaded to small cells
Source: Qualcomm Research; example for LTE FDD, 2x2 MIMO; assumptions: 70% indoor users, 200 Active users per macrocell, small cells randomly dropped in households in a mix of 2 to 6 story apartments Macro uses 2GHz and small cells uses 3.5GHz; shows the percentage of users offloaded to the small cells *Interference limited, not coverage limited; 20mW or less is sufficient (we compared 20mW/13 dBm with a baseline of 100mW/20dBm)
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Tests Show Indoor Small Cells Providing Coverage Outside
Signal Strength [dBm]
-55 to -65*
-65 to -75
-75 to -85
-85 to -95
-95 to -105
-105 to -115
Household small cell penetration
Excellent Performance
Very Good Performance
Acceptable Performance
Source: Qualcomm Research; shows actual measured received pilot strength for small cell deployment; -115dBm results in ~700kpbs for Rel-7 5MHz in thermal noise limited case; points with RSCP less than -115dBm is not shown on the plots
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Interference Management Enables Higher Densification
Source: Qualcomm Research. Simulation details: Pico small cell, 10MHz@2GHz + [email protected], D1 scenario macro 500m ISD, 100 users uniformly distributed. Gain is median throughput improvement from baseline with macro only on 10MHz@2GHz, part of gain is addition of 10MHz spectrum. Users uniformly distributed—a hotspot scenario could provide higher gains. Macro and outdoor small cells sharing spectrum (co-channel)
+4
5.7x
37x
+8 +16 +32
With Interference Management CAPACITY GAIN
Number of Small Cells Per Macro
21x
11.4x
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New Spectrum SMALL CELLS ENABLE USE OF NEW SPECTRUM BANDS
450 MHz 2 GHz 6 GHz 60 GHz
Macro Small Cells In-Room
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Accessing Spectrum Resources
Deliver the Internet of Everything
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Internet of Everything EVERYTHING AROUND US IS BECOMING INTELLIGENT & CONNECTED
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IoE Verticals
Health & Fitness
Automotive Industrial
Home
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Increased Demands on Home Networks
QUANTITY OF CONTENT COMING INTO THE HOME WILL MORE THAN TRIPLE BY 2016
Source: Cisco Visual Networking Index, May ’12
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Afterburn
The New Connected Home
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Connectivity Technologies EXTENDS QUALCOMM’S IMPACT BEYOND MOBILE
Computing Mobile Consumer Electronics Networking & Infrastructure
WIRELESS + WIRED
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Bringing the Internet of Everything to Life
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Digital 6th Sense
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Key Initiatives for Sustained, Long-Term Growth QUALCOMM INNOVATIONS UNDERPIN INDUSTRY DYNAMICS
Drive Smartphone Growth and Innovation
Enable Growth in Emerging
Regions
Solve the 1000x Data Challenge
Create New Mobile Computing
Opportunities
Deliver the Internet of Everything
TECHNOLOGY LEADERSHIP & FINANCIAL STRENGTH
Qualcomm Analyst Day NOVEMBER 15, 2012
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Steve Mollenkopf PRESIDENT AND COO
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Record Revenues and Earnings Before Tax • Double Digit Year-Over-Year Growth
Record MSM Shipments • 590 Million, up 22% Year-Over-Year
Multimode LTE Modem Leadership • ~1/3 Shipments Exiting the Year Were LTE
Snapdragon Leadership • Unmatched Tiered Roadmap
28nm – Leading the Mobile Industry • Fastest Ramp of a New Process Node in Our History
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QCT Results
$6.1B $6.7B $8.9B
$12.1B
FY’09 FY’10 FY’11 FY’12
Revenues
$1.4B $1.7B
$2.1B $2.3B
FY’09 FY’10 FY’11 FY’12
Earnings Before Tax
317M 399M
483M 590M
FY’09 FY’10 FY’11 FY’12
MSM Chip Shipments
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Successful Investments Have Resulted in Leadership
Sources: Mobile AP Unit Shipment - Strategy Analytics; GPU Shipment - Jon Peddi Research; DSP shipment - Forward Concepts; 3G/4G/LTE - Strategy Analytics; RF iSuppli, Q1’12
AP GPU DSP 3G/4G/LTE RF
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Unmatched Scale of Global Application Processor Deployment SNAPDRAGON S4 MSM8x60 LAUNCH
Commercial Sample to First Carrier Acceptance in 52 Days
15 OEMs, 19 Carriers
Our Fastest Integrated Chip to Ship 10M Units
Commercial Sample
First Carrier Acceptance
# of Carrier A
cceptances
69
Day 0 Day 52 Today
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Qualcomm LTE Leadership and Scale FIRST AND SECOND GENERATION GOBI LTE LAUNCH VELOCITY
MDM9x15MSM8960MDM9x00
Cum
ulat
ive
Num
ber o
f Car
rier A
ccep
tanc
es
(Uni
que
OE
M D
evic
es)
LTE OEM Device Acceptances on
Qualcomm LTE chips
12/2010 11/2012
Time
Nov. ’12 CAs shown are projected, based on documented OEM products in development; all other figures are actual/historical CAs
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Qualcomm Snapdragon Processor Leadership
Manufacturers Shipping
Devices Announced
Source: Qualcomm data
Designs in Development
Strategy
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Strategy DRIVE SMARTPHONE LEADERSHIP INTO ADJACENT OPPORTUNITIES
Set the Design Point
Own the Key Technology Blocks
Integration
Scale – Deployment and Ability to Invest
73
Qualcomm Approach: Own the Key Technology Blocks UNMATCHED PORTFOLIO
DSP GPU
CPU RF
Connectivity
Location
3G/4G/LTE
74
Industry Trends
Cloud Drives Modem and Connectivity Attach – OS Demands It
Technology Velocity Is Increasing
Smartphone Setting the Pace
Small Cell Brings Technology Convergence Across Wireless Operators, HLOS Ecosystems, and Broadband Providers
IMPACT TO SEMICONDUCTOR INDUSTRY
75
Windows 8 SHARED EXPERIENCE ACROSS DEVICE CATEGORIES
Built for Mobile New Programming Model Connected Standby
Leading Technologies: Modem and Connectivity
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Two Generations Ahead
Increasing Technical Complexity
Modem and Connectivity
Time-to-Market Leadership on
Next Generation Modem and Connectivity
Integration & Co-existence Critical
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/ /
Qualcomm Modem Technology Leadership A HISTORY OF TIME-TO-MARKET AND PRODUCT SUPERIORITY
2008 2010 2012 2009 2011 2007 2006 2005 2004 2013
90
70
50
30
40
60
80
100
20
10
DL 1.8 Mbps UL 384 kbps
DL 7.2 Mbps UL 5.76 Mbps
DL 28 Mbps UL 5.76 Mbps
First Integrated LTE Multimode
DL 100 Mbps
First DC-HSPA+
DL 42 Mbps
Pea
k D
L D
ata
Rat
e (M
bps)
First LTE World Mode DL 100 Mbps
MSM 6275
MSM 7200
MDM 8200
MDM 8220
MDM 9x00
MDM 9x15
MDM 9x25
First LTE Advanced Carrier Aggregation with Cat4 DL 150 Mbps
First HSDPA
First HSUPA
First Integrated LTE Smartphone
DL 100 Mbps
MSM 8960
150
First HSPA+
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Connectivity Wi-Fi BT GPS
The Unique Qualcomm Advantage HIDING THE COMPLEXITY UNDERNEATH THE MOST SEAMLESS MOBILE CONNECTIVITY
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)
22 33
27
35 36 37 38
39 40 41 42 43 1 2 8 3 4 5 6 9
28
34
7 10 11 12
13 14 17 44 18
19
20
21
23 24
25
26 Radio Frequency Bands
GERAN CDMA 1x UMTS TD-SCDMA LTE TDD LTE FDD EV-DO
80
The Unique Qualcomm Advantage HIDING THE COMPLEXITY UNDERNEATH THE MOST SEAMLESS MOBILE CONNECTIVITY
81
Continued LTE and Cellular Innovation AND NEED FOR COEXISTENCE
Commercial
Note: Estimated commercial dates.
2012 2013 2014 2015+
CDMA2000 1X
Multicarrier Rev A H/W Upgrade Phase I Phase II
EV-DO EV-DO Rev. B
Rel-11 & Beyond Rel-10 Rel-9 Rel-8 LTE Advanced LTE
Rel-11 & Beyond Rel-10 Rel-9 Rel-8 Rel-7
HSPA+ Advanced HSPA+
HSPA
WCDMA+
Voice Efficiency M2M Efficiency
802.11 g 802.11 n 802.11 ac
Wi-Fi
Wi-Fi
1X Advanced
DO Advanced
WCDMA
HSPA+
DL: 3.1 Mbps UL: 1.8 Mbps
DL: 14.7 Mbps UL: 5.4 Mbps
DL: 9.3 Mbps UL: 5.4 Mbps
DL: 14.7 Mbps UL: 5.4 Mbps
DL: 14.4 Mbps
UL: 5.7 Mbps DL: 28 Mbps
UL: 11 Mbps DL: 42 Mbps
UL: 11 Mbps DL: 168 Mbps (20 MHz)
UL: 23 Mbps (10 MHz) DL: 336+ Mbps1 (40MHz) UL: 69+ Mbps1
DL: 73 – 150 Mbps2 (10 MHz–20 MHz) UL: 36 – 75 Mbps2 (10 MHz–20 MHz)
DL: 1+ Gbps3 (Up to 100 MHz)
UL: 375+ Mbps3 (Up to 100 MHz)
DL: 1+ Gbps (e.g. 80 MHz , 3 streams)
1R11 expands multicarrier to 40 MHz to reach up to 336 Mbps, Uplink 2x2 MIMO and 64QAM takes uplink to 69Mbps, 2Peak rates for 10 and 20 MHz FDD using 2x2 MIMO, standard supports 4x4 MIMO enabling peak rates of 300 Mbps. Peak data rates takes overhead into account, per standards 172 Mbps is achievable in 20 Mhz. 3Peak rates can exceed 300 Mbps by aggregating multiple 20 MHz carriers planned for LTE Advanced (LTE Rel-10). Peak data rate can exceed 1 Gbps using 4x4 MIMO and at least 80 MHz of spectrum
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Complexity in 3G and LTE Standards Pipeline MAJOR DIFFERENTIATION OPPORTUNITIES CONTINUE TO GROW
*Projected completion date. Completion means ASN.1 Freeze Source: Qualcomm, Nov. ’12
3GPP Release R5 R6 R7 R8 R9 R10 R11 R12
Std. Complete Jun ’04 Mar ’06 Dec ’07 Mar ’09 Mar ’10 Jun ’11 Dec ’12* Jun ’14*
Products 2006 2007 2009 2010 2011 2013 TBD TBD
• HSDPA
• W-AMR • IMS
N/A
UMTS
LTE
End-to-end
• HSUPA • MBMS
• DL MIMO • DTX/DRX • HS-SCCH-Less • 64 QAM • DL L2 Enh. • E_CELL_FACH/PCH • CS over HS • Enhanced F-DPCH
N/A N/A
• A-GNSS • HS UICC • MMTEL (VoIP)
• DC HSDPA • Home NodeBs • 64QAM+MIMO • UL L2 Enh. • EUL+CELL_FACH • E-DRX+CELL_FACH • IMB • E-SCC
• EPC • CSFB, SRVCC • I-WLAN, IMS CS • eCall
• FDD/TDD (Cat 1-5) • iRAT LU/G/C/T • TM1-7 • Up to 4x4 DL MIMO • SON/ANR • C-DRX, SPS, TTI-B • QoS
• OTDOA/PRS FDD, UP, CP
• OTDOA/PRS TDD • eMBMS • SSAC • TWC • TM8 DL BF • Enh. Home eNB
• DC HSDPA+MIMO • Interband DC
HSDPA • DC HSUPA • Home NodeB Enh.
(inbound mobility, hybrid mode)
• TxAA/non MIMO UEs
• CS Fallback enhancements
• SRVCC enhancements
• FDD/TDD Cat 6-8 • Carrier Aggr. • eMBMS enh. • TM9 • Enh. MIMO UL/DL • eICIC • Relays • MDT
• ZUC LTE Chinese encryption
• SIPTO/LIPA
• 4C HSDPA • Interband MC • MC
HDSPA+MIMO • SON/ANR • HNB: Interference
Management • Minimization of
drive tests
• FMC • Enh. Access Cntrl • SRVCC 3G to
LTE • IMS VoIP with
local breakout
• Enhanced CA • Enhanced eICIC • CoMP • UTDOA • ePDCCH • New TD subfrm • In-device coex. • Smartphone enh. • eMBMS continuity • SON/MDT Enh.
• FE-FACH • HSDPA Multi-Flow • UL MIMO • UL Tx Div • DL 4xMIMO • 8C HSDPA • SON/MDT
Enhancements
• LTE Direct • New Carrier Type • Multi-flow • Int. Suppr., TDD IM • 3D MIMO • Small cell enh. • Push to Talk • Enhanced eMBMS • Radio IW w/ WiFi • Pub Safety support • M2M
• Hotspot 2.0 • Enhanced WiFi IW • EVS codec • M2M • Congestion cntrl • Dynamic B’cast
• HSPA Hetnet • WCDMA+ • Flexible bandwidth • Uplink Enhancements • Radio interworking w/
Wi-Fi • M2M
And beyond…
83
Only Qualcomm Integrates Wi-Fi, Bluetooth, FM and Location into 3G/LTE
Enhanced Wi-Fi/LTE Coexistence
Improved Performance, Lower Latency
WAN Assists Location, Lowers Power
Pin Compatible 3660 3680
300+ 28nm INTEGRATED CONNECTIVITY DESIGNS IN DEVELOPMENT
Digital Signal Processors
Dual-Channel Memory
Snapdragon Adaptive Power Techniques
Multimedia
CPU Cores
Modem LTE World
GPS Wi-Fi
Bluetooth FM
3680 802.11n/ac
BT/FM Radio
84
Afterburn
802.11ac End-to-End Portfolio
Computing Mobile Consumer Electronics Networking
Complete 802.11ac Portfolio
85
Leading End-to-end Positioning System with Qualcomm Mobile and Networking Solutions
Enabling Operators and Venues to Provide New Location Services
>1 Billion Location Enabled Devices Shipped
Qualcomm: #1 Location Technology Provider ADVANCING THE MOBILE EXPERIENCE THROUGH INDOOR LOCATION
Source: ABI Research, Sep. ’12
Leading Technologies: Application Processors
87
Leading IP Technology Roadmap
Accelerating Node Leadership
Application Processor Strategy
Differentiated Approach
Architectural Control of SoC
88
Most Efficient Architecture
Schedule
CPU Leadership
Highest Performance at the Lowest
Power Differentiated SoC
INCREASING INVESTMENT IN LEADERSHIP
89
A History of Firsts
2010 2011 2012 2008
1st 1 GHz Scorpion CPU
1st Integrated 3G Multimode
1st 1.4 GHz Scorpion CPU
1st Integrated GPS + GLONASS
1st & Only aSMP Dual Core
1st Integrated 3G/4G Multimode
1st on 28nm
Krait 200 CPU
New Krait 300 CPU
90 Performance (DMIPS)
Pow
er (m
W)
0
500
1000
1500
2000
0 1000 2000 3000 4000 5000 6000 7000
Half the Power
Laptop Only
CPU Leadership Now and into Next Generation HIGHEST PERFORMANCE AT THE LOWEST POWER
Source: Qualcomm lab testing
x86 SOC (32nm HKMG)
Current Gen Competitor (40nm LP)
Newly Released Competitor (32nm HKMG)
Snapdragon “Krait” 200 (28nm LP)
Snapdragon “Krait” 300 (28nm LP)
91
Great Coverage of the Latest Snapdragon S4 Devices
Droid DNA Xiaomi Phone 2 LG Nexus 4 HTC 8X
92
Processor Synergy
Advanced GPU Architecture
GPU Leadership
Leadership in Graphics
Performance and Efficiency
Comprehensive Ecosystem
93
Adreno 320 GPU Leads in Power-efficient Performance LATEST GPU ARCHITECTURE—HIGHER PERFORMANCE, LOWER POWER
Sources: AnandTech ’12, Qualcomm data R
elat
ive
Per
form
ance
per
mW
Performance Power Efficiency (Higher Is Better)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Competitor A quad-core
Snapdragon dual-core (8960) Adreno
225
Competitor B quad-core
Snapdragon quad-core (8064) Adreno
320
5.1
5.9
8.7
8.8
9
12
13
13
13
29
Samsung Galaxy Nexus(OMAP4460/SGX540)
Huawei Ascend P1 (OMAP4460/SGX540)
LG Optimus 4X HD (Tegra 3)
Samsung Galaxy S 2 (Exy/Mali400)
HTC One X (Tegra 3)
HTC One S (S4/Adreno 225)
HTC One X (S4/Adreno 225)
Samsung Galaxy S 3 (Exy4/Mali400)
Samsung Galaxy S 3 (S4/Adreno 225)
LG Optimus G (S4 Pro/Adreno 320)
GLBenchmark 2.5—Egypt HD (Offscreen 1080p) Frames per Second—Higher Is Better
94
Adreno 225
Adreno 320: Immersive Visual Experiences REDEFINING MOBILE GRAPHICS
95
Adreno 320
Adreno 320: Immersive Visual Experiences REDEFINING MOBILE GRAPHICS
More Complex Scenes at High Frame Rate
More Detailed Textures for Improved
Visual Realism
More Advanced Lighting Effects
Support for Larger Displays
and Higher Resolutions
Performance Improvement
96
More Efficient
Delivers High Performance
DSP Leadership
Enables Differentiated
User Experiences
Programmable
97
Harnessing Developer Innovation
Open Architecture
DSP Access Program
Large Installed Base Image
Processing
Custom DSP Architecture ENABLING RICH USER EXPERIENCES WITHOUT SACRIFICING BATTERY LIFE
Delivering Rich Experiences
Voice Quality
Augmented Reality
High Definition Audio
Object Recognition
Gestures
“Qualcomm leads the global unit market for DSP silicon shipments” Will Strauss President, Forward Concepts
Bringing Leading Technology to Emerging Accounts
99
Developing New Channel
Incremental Opportunity
Emerging Accounts
Investing for Growth
Technology Leadership Matters
100
Opportunity for Growth CHINA EMERGING ACCOUNT CONVERSION TO 3G
Source: 3G Connections: Wireless Intelligence, Nov. ’12, including 1x; Handset shipments: iSuppli, Q4’12, all technologies
~1 Billion Connections in China • 27% 3G
90+ China OEMs
Annual Handset Shipments ~700M
101
Qualcomm Maturing Turnkey Model INVESTING FOR GROWTH
Ecosystem, Channel Support
Complete Reference Design
Competitive Price
Superior Technology Brand
OEMs Launches
Launch Time-to-Market in Design
102
Qualcomm Engaged Across a Growing Account Base UNIQUE ABILITY TO SUPPORT DIVERSE REQUIREMENTS
(BBK)
103
Q2’11/Q3’11
MSM 7x27
MSM 7x25
First High Volume
Q4’11
First 1GHz Single Core
7x27A Single Core
Q1’13
Quad Core
8x25Q Quad Core
8x30 Dual Kraits
Q2’12
Dual Core
8x25 Dual Core
Our Industry-Leading QRD Portfolio QUAD CORE AND “KRAIT” DESIGNS
8x25 8x25q Quad Core CPU New Memory Controller LPDDR2 Single Platform for UMTS & CDMA DSDS And DSDA 720p Capture and Playback Up to 8 Megapixel Camera
8x30 Dual “Krait” CPUs Adreno GPU 28nm Process Faster Memory Industry Leading Modem Integrated Connectivity GPS
>75% Connectivity Attach in QRD, and Increasing
104
Only Single Platform to Support Top Three China Carriers
TD-SCDMA/LTE
CDMA/LTE
HSPA+/LTE
MSM8x30
*New Opportunity* ~150M Connections ~225M Connections ~675M Connections
Source: Wireless Intelligence. Nov. ’12
Our Fabless Semiconductor Model
106
Leading Fabless Foundry Capital Investment MOBILE LEADERSHIP NOW AND IN THE FUTURE
$4.5 $5.5
$10.8 $11.3
$5.4
$12.0
$17.6
$19.6
2009 2010 2011 2012
Capital Expenditures ($ Billions)
Intel
Fab Suppliers
Source: Gartner ’12, Fab Suppliers: Global Foundries, Samsung, TSMC, UMC
Scalable Roadmap: Enabling Leadership for the Future
108 *Reflects a numbering change; formerly known as MSM8270
Leading Roadmap In Production Segment
Premium and Mid Smartphones
QSC61x5 DOrB/1xAdv
QSC6295 HSPA+
QSC62xx HSDPA
QSC60x5 1x/DOrA
QSC11x0 1x
MDM9600 LTE
DOrB DC-HSPA+
MDM8215 DC-HSPA+
MDM6x00 DOrB
HSPA+
MDM8220 DC-HSPA+
MDM9200 LTE
DC-HSPA+
MDM9615 LTE DOrB DC-HSPA+ TD-SCDMA
MDM9625 LTE-A DOrB
HSPA+ R10 TD-SCDMA
MDM8225 HSPA+ R10
MDM8200A HSPA+
S2 MSM8x55
S2 APQ8055
S2 MSM7x30
S1 MSM7x25
S1 MSM7x27
S1 QSD8x50
S3 MSM8x60
S3 APQ8060
S1 MSM7x27A
S1 MSM7x25A
S4 Plus MSM8x30
S4 Plus APQ8030
S4 Plus APQ8060A
S4 Plus MSM8960
S4 Plus MSM8x60A
S4 Prime MPQ8064
S4 Play MSM8x25
2012
MDM9215 LTE
DC-HSPA+ TD-SCDMA
MDM9225 LTE-A
HSPA+ R10 TD-SCDMA Modem and
Data Cards
High-Volume Smartphones
Feature Phones
Computing/CE
2013
S4 Pro MSM8960T
S4Plus MSM8x27
S4 Plus MSM8930
COMING SOON
S4 Pro APQ8064
109
Coming Soon…
Next Generation CPU Micro-architecture
Next Generation Adreno GPU
Third Generation LTE Modem
110
Strong Financial Growth
Continued Snapdragon and Modem Leadership
Increasing 3G/LTE Product Mix
Global Scale, Broad/Tiered Roadmap
Increased R&D Investments for Long-Term Technology Leadership and Expanding Opportunities
Qualcomm Analyst Day NOVEMBER 15, 2012
112
Derek Aberle EVP & GROUP PRESIDENT
113
Fiscal 2012 QTL Highlights RECORD RESULTS
REVENUES +17% YOY
EARNINGS BEFORE TAX +18% YOY
EARNINGS BEFORE TAX %
TOTAL REPORTED DEVICES SALES(1)
+25% YOY
EST. 3G/4G DEVICES SHIPPED BY LICENSEES(1)(2)
+18% YOY
EST. 3G/4G DEVICE ASP MIDPOINT(1)(2)
+6% YOY
CDMA-BASED LICENSEES
OFDMA-BASED (w/o CDMA) LICENSEES
(1) and (2) See notes included in the appendix section at the end of the presentation.
114
3G/4G multimode devices covered by existing 3G agreements 30+ OFDMA/4G (without 3G) royalty-bearing licensees • LG, Nokia, Pantech, Samsung, Sony Mobile, and ZTE
Extensive Qualcomm R&D driving broad patent portfolio applicable to 3G/4G products Qualcomm leading inventor of advanced enabling technologies, including 3G and 4G
115
Continued Innovation QUALCOMM CONTRIBUTING TO A VARIETY OF SIGNIFICANT TECHNOLOGIES
NFC
Semiconductor
WLAN/ 802.11
WWAN
Video Codecs
Sensors
Apps Processor
Camera
Position Location
Audio Processing
RF and Antenna
Security
Graphics Processing
Wireless Charging
Display
OS/User Interface
116
Growing China Opportunity
90+ Chinese 3G licensees to date
~27%* 3G penetration
Growth of smartphones across all tiers
Vibrant carrier competition
LTE TDD advanced trials underway
WCDMA specified for roaming by China Mobile
*Source: Wireless Intelligence (includes 1x), Nov. ’12
117
Regional Subscriber Wireless Penetration Rates MULTIPLE CONNECTIONS PER SUBSCRIBER, LONG RUNWAY FOR GROWTH
121% 138%
62%
101%
CY11 CY16
Total Penetration 3G/4G Penetration
Pen
etra
tion
Rat
e* (%
)
78%
106%
14%
43%
CY11 CY16
Total Penetration 3G/4G Penetration
DEVELOPED REGIONS (North America, Europe, Japan, Korea)
EMERGING REGIONS (Latin America, MEA, China, India, ROW)
*Penetration rate is measured by connections/population Source: Wireless Intelligence, Nov. ’12
118
29% 39%
49% 55%
62% 67%
2011 2012 2013 2014 2015 2016
Global Smartphone Adoption SMARTPHONES FORECAST AS A % OF HANDSET SHIPMENTS (ALL TECHNOLOGIES)
Source: Average of Gartner, Oct. ‘12; Strategy Analytics, Aug. ‘12
119
Fiscal 2012 3G/4G Handset Trends - Developed Regions
Continued increase in estimated ASPs • Continued shift to smartphones • Selling prices increased in the high-tier • Estimated ASPs within low- and mid-tiers relatively stable • Low- and mid-tier not cannibalizing high-tier
120
Fiscal 2012 3G/4G Handset Trends - Emerging Regions
Continued increase in estimated ASPs • Strong shift to smartphones across price levels • Continued growth in high-tier devices • Significant increase in low-tier smartphone models
Low-tier smartphone ASP premium over feature phone
121
Expanding Wireless into Other Device Categories INCREMENTAL GROWTH CATEGORIES BEYOND HANDSETS
Non-handset mobile broadband device shipments expected to grow at ~20% CAGR from 2011–2016
Sources: CAGR is based on average of Gartner, Strategy Analytics, IDC , ABI from Mar. – Oct. ‘12. Devices include USB modems, embedded notebooks/netbooks, mi-fi routers, tablets, e-readers, gaming consoles, CE devices (portable navigation devices, portable media player, digital still cameras, digital camcorders), and M2M (telematics, utilities, security, tracking, healthcare, retail).
122
Licensing Program Designed to Promote Growth of Incremental Non-Handset Devices
Impact on ASP and Implied Royalty Rate Calculation Will Depend on Mix and Volume
TABLETS AND EMBEDDED LAPTOPS Incremental revenue opportunity Royalty caps to promote widespread 3G/4G adoption Total Reported Device Sales reflect ASP of complete device
EMBEDDED MODULES Royalty amounts generally subject to a minimum or floor Total Reported Device Sales reflect module ASP
123
Future Licensing Initiatives
Wireless Charging Small Cells Displays
124
Industry-leading licensing program Continued technology leadership, including in 3G/4G and other device-related technologies • Strong essential and non-essential patent portfolio
Key wireless trends driving QTL growth: • Smartphones, multimode 3G/4G devices • Continued 2G to 3G migration in emerging regions • Favorable global ASP trends • New non-handset devices
Future licensing opportunities
Qualcomm Analyst Day NOVEMBER 15, 2012
126
Bill Keitel EVP & CFO
127
Record Fiscal 2012 Results
(3) (4) (5) (6) See notes included in the appendix section at the end of the presentation.
FY’11 FY’12
$3.71
$3.20
Non-GAAP(5) EPS(4)(6)
FY’11 FY’12
$19.12B $14.96B
Revenues(3)(4)
FY’11 FY’12
$7.10B $6.08B
Non-GAAP(5) Operating Income(3)(4)
$6.01B
$4.90B
FY’11 FY’12
590M 483M
MSM Chip Shipments
128
Qualcomm Ranked in Top 10% of Non-Financial S&P 500 Companies
*Based on last twelve months reported GAAP for FY2012 and FY2011 as of Nov. 7, 2012 Source: Thomson Reuters
Financial Metric* FY 2012 % Ranking
2 year % Ranking
(FY 2011 & FY 2012)
Revenue & Earnings Growth 99% 99%
Operating Margin 91% 93%
Return on Invested Capital 93% 95%
Operating Cash Flow Margin 90% 92%
129
-4%
-2%
0%
2%
4%
6%
8%
2009 2010 2011 2012 2013
Consensus Gross Domestic Product GDP (YOY): HISTORICAL ACTUALS, CONSENSUS ESTIMATES & QC BASELINE*
Relevant correlations between GDP growth and total mobile devices Qualcomm guidance not as optimistic on the developed regions Midpoint of our guidance is based on 3.0% world GDP growth in 2013 compared to consensus of 3.4%
*Input into Qualcomm’s 2013 plans and guidance. GDP forecasts are from Consensus Economics®. Country weights are determined using IMF Purchasing Power Parity (PPP).
Developed Regions
World
Emerging Regions
Actual Forecast
Consensus
QC Baseline
130
200 208
173 185
75 73
165 210
133
168 49
61
2011 2012
Latin America
ROW
China/India
Japan/Korea
Europe
North America
Emerging 347 439 est. Developed 448 466 est.
Total 795 905 est.
2011 – 2012 Regional* 3G/4G Device Shipment Estimates(1)
CALENDAR YEAR, MILLIONS, MIDPOINTS(2), AS OF NOVEMBER 7, 2012
(1) and (2) See notes included in the appendix section at the end of the presentation. * Regional device shipments are Qualcomm estimates and include handsets, data devices, telematics, security devices and some quantity of channel inventory.
787–803 880–930e
Developed Regions
Emerging Regions
+5
+10
-15 Change from prior guidance
+15 -15
131
Emerging 439 est. 536 est. Developed 466 est. 499 est.
Total 905 est. 1,035 est.
2012 – 2013 Regional* 3G/4G Device Shipment Estimates(1)
CALENDAR YEAR, MILLIONS, MIDPOINTS(2), AS OF NOVEMBER 15, 2012
(1) and (2) See notes included in the appendix section at the end of the presentation. * Regional device shipments are Qualcomm estimates and include handsets, data devices, telematics, security devices and some quantity of channel inventory.
880–930e
208 220
185 204
73 75
210 243
168
210 61
83
2012 2013
Latin America
ROW
China/India
Japan/Korea
Europe
North America
Developed Regions
Emerging Regions
1,000–1,070e
132
41%
33% 34% 34% 33% 30%
0%
20%
40%
60%
CY08 CY09 CY10 CY11 CY12 CY130%
15%
30%
45%
CY08 CY09 CY10 CY11 CY12 CY13
Estimated 3G/4G Replacement Rate*
*Guidance as of November 15, 2012
Developed
Emerging
Worldwide Regional
Replacement Rate 2012/2013 Highlights Lengthening Replacement Cycles in North America
Increasing Contribution from Emerging Regions
133
Past
Range: 15 – 20 weeks (thru 2011)
Current
Range: 13 – 18 weeks (2012)
Future
Range: 11 – 16 weeks (2013)
Estimated* 3G/4G Channel Inventory CHIPSET SHIPMENT THROUGH SUBSCRIBER DEVICE PURCHASE
• Feature phone centric
• Distribution model: majority operator procured
• Limited turnkey volume
• Continuing migration from feature phones to smartphones
• Volume ramp in non-operator procured devices
• Consumer buying patterns trending towards flagship models
• Continuing trends towards flagship models
• Continued growth in non-operator procured devices
• Longer term (next 3-5 years) expect transition to PC-like turnkey ODM model
*Estimates as of November 15, 2012
134
• Growth in smartphones & connected devices
• 3G/LTE adoption • Increased device capabilities;
memory, display, camera...
$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)
*Guidance as of November 7, 2012. (1) and (2) See notes included in the appendix section at the end of the presentation.
Learning Curves ’97–’13 est. 85% ’99–’13 est. 96% ’07–’13 est. 99%
• Voice-centric devices • Growth in CDMA 2000 • Focus on developed
regions
• Transition to data • Ramp in WCDMA and EV-DO • Significant growth in emerging regions
• DOrA, HSPA+ • Increased device
capabilities; • 2G to 3G migration
Fiscal Years
Voice/Data Transition Smartphones
Midpoint of $214–$226* Estimate for
FY’13
Voice & Enhanced Data Voice
135
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
(1) and (2) See notes included in the appendix section at the end of the presentation.
Handset ASPs
Non-Handset ASPs
136
FY'12 FY'13 est.
Fiscal 2013 Outlook AS OF NOVEMBER 7, 2012
(3) (5) (6) See note included in the appendix section at the end of the presentation. **Guidance as of November 15, 2012
FY'12 FY'13 est.
$8.1B–$8.6B $7.1B
Non-GAAP(5) Operating Income(3)
FY'12 FY'13 est.
$23B–$24B
$19.1B
Revenues(3)
Non-GAAP(5) R&D and SG&A Combined(3)
FY'12 FY'13 est.
$4.12–$4.32 $3.71
Non-GAAP(5) EPS(6)
137
First Quarter Fiscal 2013 Outlook AS OF NOVEMBER 7, 2012
(1) (3) (5) (6) (7) See notes included in the appendix section at the end of the presentation.
Q1'12 Q1'13 est.
168M–178M 156M
MSM Chip Shipments
Q1'12 Q1'13 est.
$5.6B–$6.1B $4.68B
Q1'12 Q1'13 est.
$1.08–$1.16
$0.97
Non-GAAP(5) EPS(6)
Sep'11 Qtr Sep'12 Qtr est.
$46.0B–$51.0B $41.4B
Total Reported Device Sales(1)(7)
Revenues(3)
138
Cash Returned to Stockholders While Continuing to Invest in the Business 10 YEAR CASH FLOW* APPROXIMATELY $70 BILLION
*Based on components of certain GAAP cash flows for fiscal years 2003–2012. **Acquisitions also includes other investments, including BWA spectrum won in India. Capex is presented net of proceeds from sale of our 700 MHz spectrum in December 2011.
Cash Uses
$60B: Cash Flow from Operations Before R&D
Cash Proceeds
$19B: Net Purchases of Marketable Securities
$20B: R&D
$19B: Return to Stockholders
(Repurchases and Dividends)
$5B: Capex**
$10B: Stock & Debt
139
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
FY'03 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13**$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12
$19.5 Billion Returned to Stockholders Over 10 Years AS OF NOVEMBER 7, 2012
Note: The Company effected a two-for-one stock split in August 2004. All references to per share data have been adjusted to reflect the stock split. *Gross repurchases **As of November 7, 2012
Stock Repurchases* Dividends Paid (Millions) (Millions)
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
Sep-04
Jan-05
Mar-05
Jun-05
Sep-05
Jan-06
Mar-06
Jun-06
Sep-06
Jan-07
Mar-07
Jun-07
Sep-07
Jan-08
Mar-08
Jun-08
Sep-08
Jan-09
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Quarterly Cash Dividend Per Share (Based on Date Payable)
$0.025 $0.035 $0.05
$0.07 $0.09
$0.12 $0.14
$0.16 $0.17 $0.19
$0.215 $0.25
140
Stock Repurchase Plan Update QUALCOMM HAS TWO 10B5-1 STOCK BUYBACK PROGRAMS
Program Long-Term Performance Target
Opportunistic: Repurchases below targeted price levels > QCOM cost of capital
RSU offset: Formulaic repurchases based on stock price and volatility
5-10% discount from RSU issuance price
141
Fiscal 2013 Additional Metrics*
*Guidance as of November 15, 2012. (5) See notes in the appendix section at the end of the presentation.
QCT Operating Margin ~18.5% to 20.5%
QTL Operating Margin ~85.5% to 87.5%
QCT Revenue per MSM Significant increase vs. FY’12
Change in Segment Operating Expense
+ approx. $50M QTL - approx. $50M QCT
(patent expenses)
Non-GAAP(5) Combined R&D and SG&A year-over-year growth
+18 to 20% y-o-y R&D is major driver
Pre-Revenue R&D ~27%
Q1 and FY Non-GAAP(5) Tax Rates ~18% to 19%
Note: FY’13 guidance does not include estimates for realized investment gains or losses on our cash and marketable securities portfolio unless they are reasonably certain, and excludes any new acquisitions and potential stock repurchases.
142
ONSHORE CASH OFFSHORE CASH
September 30, 2012 Balance
~ $9.8B Target Minimum Cash/Liquidity $5B
~ $17.0B Held by Foreign Subsidiaries
Primary Sources QTL Licensing QCT Chipsets
Marginal Tax Rate High Low
Primary Uses • U.S. operations • R&D investments • Acquisitions • Cash dividends • Stock repurchases
• International operations • R&D investments • Acquisitions
Repatriation N/A High Marginal Tax
Cash and Marketable Securities
143
Key Growth Initiatives Drive Long-Term Revenue and Earnings Growth
Drive Smartphone Growth and Innovation
Enable Growth in Emerging
Regions
Solve the 1000x Data Challenge
Create New Mobile Computing
Opportunities
Deliver the Internet of Everything
QUALCOMM’S LONG-TERM PLAN CONTINUES TO HAVE A DOUBLE-DIGIT REVENUE AND EPS CAGR OVER NEXT FIVE YEARS*
*Estimates as of November 15, 2012
Appendix
145
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.
3) Throughout this presentation, revenues, operating expenses, operating income, earnings before tax (EBT) and effective tax rates are from continuing operations (i.e., before discontinued operations and adjustments for noncontrolling interests), unless otherwise stated.
4) The following should be considered in regards to the year-over-year comparisons: Fiscal 2012 Non-GAAP results included Qualcomm Atheros, Inc., which was acquired on May 24, 2011, as compared to fiscal 2011 Non-GAAP results, which only included Qualcomm Atheros, Inc. from the date of the acquisition. Fiscal 2011 operating and free cash flows reflected the impact of a $1.5 billion income tax payment primarily related to license and settlement agreements entered into in fiscal 2008.
5) Non-GAAP results exclude the QSI segment, certain share-based compensation, certain acquisition-related items and certain tax items.
6) Throughout this presentation, net income and diluted earnings per share are attributable to Qualcomm (i.e., after discontinued operations and adjustments for noncontrolling interests), unless otherwise stated.
7) Royalties are recognized when reported, generally one quarter following shipment.
146
Financial Strength
*Includes capital leases and the BWA subsidiaries’ loans and debentures. **EBITDA is defined as income from continuing operations before income tax expense, depreciation and amortization, and interest and dividend income, net. (4) (5) See notes included in this appendix section.
(In Billions) September 2011 September 2012
Domestic $5.7 $9.8 Cash Resources and
Operating/Stock Repurchases Flexibility
Offshore $15.2 $17.0
Total Cash and Marketable Securities $20.9 $26.8
Total Assets $36.4 $43.0
Solid Balance Sheet Stockholders’ Equity $27.0 $33.5
Debt* $1.2 $1.1
EBITDA** $6.0 $6.9 Cash Flow to Support Future Growth and
Dividends Non-GAAP(5) Free Cash Flows(4) $4.8 $5.2
Reconciliations
148
Non-GAAP Results IN MILLIONS, EXCEPT PER SHARE DATA
149
Non-GAAP Cash Flow IN MILLIONS
150
EBITDA IN MILLIONS
151
Business Outlook IN BILLIONS, EXCEPT PER SHARE DATA, AS OF NOVEMBER 7, 2012
152
Business Outlook, continued IN BILLIONS, EXCEPT PER SHARE DATA, AS OF NOVEMBER 7, 2012
153
Fiscal 2013 Combined R&D and SG&A Guidance IN MILLIONS, AS OF NOVEMBER 15, 2012
Thank You