Qualcomm 2012 Annual Report Download - page 38

presented as discontinued operations. Income (loss) from discontinued operations includes share-based compensation and excludes certain
general corporate expenses allocated to the FLO TV business during the periods presented.
Summarized results from discontinued operations were as follows (in millions):
Looking Forward
The deployment of 3G networks enables increased voice capacity and higher data rates than prior generation networks, thereby supporting
more minutes of use and a wide range of mobile broadband data applications for handsets, 3G connected computing devices and other consumer
electronics. According to the Global mobile Suppliers Association (GSA), as of November 2012, to complement their existing 3G networks,
more than 110 wireless operators have deployed and more than 300 wireless operators are planning to deploy OFDMA-based technology, often
called 4G, in new wireless spectrum to gain additional capacity for data services. As a result, we expect continued growth in the coming years in
consumer demand for 3G and 3G/4G multimode products and services around the world. In addition, we expect an increasing number of
devices, such as computers, consumer electronics and networking equipment, to require multiple communications technologies to support a
variety of connected applications.
As we look forward to the next several months, the following items are likely to have an impact on our business:
In addition to the foregoing business and market-based matters, we continue to devote resources to working with and educating participants
in the wireless value chain as to the benefits of our business model in promoting a highly competitive and innovative wireless industry.
However, we expect that certain companies may continue to be dissatisfied with the need to pay reasonable royalties for the use of our
technology and not welcome the success of our business model in enabling new, highly cost-effective competitors to their products. We expect
that such companies will continue to challenge our business model in various forums throughout the world.
Further discussion of risks related to our business is presented in the Risk Factors included in this Annual Report.
Critical Accounting Estimates
Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United
32
Year Ended
September 30,
2012
September 25,
2011
September 26,
2010
Revenues
$
—
$
5
$
9
Income (loss) from discontinued operations
1,203
(507
)
(459
)
Income tax (expense) benefit
(427
)
194
186
Discontinued operations, net of income taxes
$
776
$
(313
)
$
(273
)
• The worldwide transition from 2G to 3G and 3G/4G networks is expected to continue, including the further expansion of 3G in China,
India and other emerging regions. We expect that the emergence of lower-end smartphone products will contribute to such expansion.
• We expect consumer demand for advanced 3G and 3G/4G multimode devices, including smartphones and data-centric devices, such as
tablets and e-readers, to continue at a strong pace.
• We expect that CDMA-based device prices will continue to vary broadly due to the increased penetration of smartphones combined
with active competition throughout the world at all price tiers. Additionally, varying rates of economic growth by region and stronger
growth of CDMA-based device shipments in emerging regions, as compared to developed regions, are expected to continue to impact
the average and range of selling prices of CDMA-based devices.
• We continue to invest significant resources toward the development of technologies and products for voice and data communications,
primarily in the wireless industry, including advancements to 3G and 4G LTE (an OFDMA-based standard) networks, wireless
baseband chips, our converged computing/communications (Snapdragon) chips, multimedia products, software and services, as well as
our IMOD and other display technologies.
• We expect industry demand for 28 nanometer integrated circuits to continue to be strong. Accordingly, even as we continue to increase
our supply of 28 nanometer integrated circuits, we may still experience supply shortages for our 28 nanometer integrated circuit
products during the early part of fiscal 2013. Our QCT business anticipates a strong first quarter in fiscal 2013 as the supply of 28
nanometer integrated circuits increases and as new 3G and 3G/4G devices are launched for the holiday season.