The loss of iPhone modem revenue is a source of upside should Apple ( AAPL ) fail to qualify their modem, the firm said at the time. The firm views the recent rebound in China smartphone sales in the month of May as well as mild restocking demand after inventory clearance for smartphone components as early signs of a return to normal seasonality for the market, even though at lower level. With the combination of the early stages of a recovery as well as Qualcomm shares trading at an "inexpensive valuation," the firm sees early signs of earnings estimate revisions driving a re-rating of the earnings multiple.