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Technology Stocks : CDMA, Qualcomm, [Hong Kong, Korea, LA] THE MARKET TEST!
QCOM 175.25+0.6%Dec 19 3:59 PM EST

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To: Rick Kiray who wrote (1500)1/16/1997 9:12:00 AM
From: kech   of 1819
 
Rick - You raise an interesting problem. It is especially interesting that Sprint is only doing this in San Diego. I know there is a lot of competition there do you suppose they are just trying to get as many people to sign up in hopes of offering additional services to them at a later date. I agree that the $1.75 scenario you mention is going to make it hard for Sprint to make up its $450- $199 purchase price. And if Harvey is right it is even worse at $3000-$199. But on those terms it would also seem like a pure emergency buyer might be somewhat turned off by the up front $199 charge and might be tempted by a free phone elsewhere. What is the cheapest monthly fee for a "free analog phone" emergency system offered by PACBELL or other competitor. Even if the monthly fee is $10.00 it would still take 20 months to recoup the out of pocket $199.
Still, maybe in San Diego they figure there will be a lot of QCOM employees and people in the city who have heard of QCOM who will buy the phone and the no monthly fee contract but use it anyway just because they are interested in the product and company. Just a guess as to why they might try this in San Diego and not elsewhere.
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