QUALCOMM Incorporated (QCOM)
Q1 2011 Earnings Call
January 26, 2011 4:45 pm ET
Steven Mollenkopf - Executive Vice President and Group President
William Keitel - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Derek Aberle - Executive Vice President and President, Qualcomm Technology Licensing
Paul Jacobs - Chairman and Chief Executive Officer
Warren Kneeshaw - Vice President of Investor Relations
Tal Liani - BofA Merrill Lynch
Mark Sue - RBC Capital Markets, LLC
Maynard Um - UBS Investment Bank
Rod Hall - JP Morgan Chase & Co
Tim Long - BMO Capital Markets U.S.
Brian Modoff - Deutsche Bank AG
Ehud Gelblum - Morgan Stanley
Ittai Kidron - Oppenheimer & Co. Inc.
Timothy Luke - Barclays Capital
Simona Jankowski - Goldman Sachs Group Inc.
T. Michael Walkley - Canaccord Genuity
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Ladies and gentlemen, thank you for standing by. Welcome to the QUALCOMM First Quarter Fiscal 2011 Conference Call. [Operator Instructions] The playback number for today's call is (800) 642-1687. International callers please dial (706) 645-9291. The playback reservation number is 36932148. I would now like to turn the call over to Warren Kneeshaw, Vice President of Investor Relations. Mr. Kneeshaw, please go ahead.
Thank you, Mark, and good afternoon, everyone. Today's call will include prepared remarks by Dr. Paul Jacobs who is joining us from Davos, Switzerland, Derek Aberle, Steven Mollenkopf and Bill Keitel. In addition, Steve Altman and Don Rosenberg will join the question-and-answer session. An internet presentation and audio broadcast accompany this call and you can access them by visiting our website at www.qualcomm.com.
During this conference call, if we use any non-GAAP financial measures as defined by the SEC and Regulation G, you can find the required reconciliations to GAAP on our website. I'd also like to direct your attention to our 10-Q and earnings release, which were filed and furnished respectably with the SEC today and are available on our website. We may make forward-looking statements relating to our expectations and other future events that may differ materially from QUALCOMM'S actual results. Please review our SEC filings for a detailed presentation of each of our businesses and associated risks and other important factors that may cause our actual results to differ from these forward-looking statements. Of specific note, we have excluded the Atheros business from our guidance. As it relates to the proposed acquisition of Atheros, before making any voting decisions, investors are urged to read the Atheros' proxy statement and other relevant materials when they become available because they will contain important information about the transaction.
Now, it is my pleasure to introduce QUALCOMM's Chairman and Chief Executive Officer, Dr. Paul Jacobs.
Thanks, Warren, and good afternoon, everyone. We're very pleased to report record revenues, earnings per share and MSM chipset shipments in this quarter, driven by increased demand for smartphone and data-centric devices across an expanding number of regions and price points.
It's been a successful quarter and there really is a lot to be excited about. First and foremost is the continued unabated demand for wireless data. Gartner expects sales of smartphones in the fourth quarter of 2010 to grow 15% sequentially and over 70% year-over-year. Gartner forecast annual smartphone shipments to grow more than 50% year-over-year in 2011 to reach approximately 440 million units. And of course speaking of smartphones, we're happy to see the Verizon iPhone announcement because it's been a subject of intense speculation, but I have to say we have no other comments to make on that topic.
In addition to smartphones, we're now seeing increasing volumes of new 3G-enabled device types such as tablets and e-readers. Our Snapdragon family of chipsets, including our dual core products, are well-positioned to target the range of devices that we expect to be launched this year.
To help support the traffic and provide higher data rates to consumers, operators are continuing to invest in the latest technologies and are purchasing additional spectrum. Adoption of advanced wireless technologies will continue to be a catalyst for network and device upgrades in the coming year. Verizon launched LTE in 38 cities and started offering data modems based on QUALCOMM'S multimode solution. AT&T continues to promote its HSPA+ service, has they will be pulling in their launch plans for LTE. And furthermore, we've also demonstrated LTE TDD in India.
The evolution of 3G also continues to be a bright point for our business with the GSA announcing that they are currently 103 commercial HSPA+ networks, 13 of these offering 42 megabit per second data rates with Dual-Carrier HSPA+. According to CDG, three operators have launched DO Rev. B networks while an additional four operators have announced plans to deploy the technology.
And our leading position in these technologies and multimode chipsets allows us to address the complexities these heterogenous networks create, positioning us very well for the future.
As a further example of how our opportunities are expanding, Microsoft announced that the next version of Windows will support Systems on a Chip architectures, including ARM-based systems for QUALCOMM. We have a strong working relationship with Microsoft. And at CES, they demonstrated the next version of Windows running on our Snapdragon platform.
We've also announced that we've entered into an agreement to buy Aeros. You heard us talk about a vision around the convergence of mobility, computing, consumer electronics. As we commented on our recent call, this announcement should be viewed as a statement about our commitment to provide a complete set of solutions to address this trend. This acquisition will allow us to build upon our capabilities, add to our suite of best-in-class technology assets, provide new sales channels. We're looking forward to the transaction closing and joining with a proven leader.