Tero, agreed on all points, except the last paragraph.
NOK's hypothetical acquisition of QCOM shifts the ASIC monopoly from QCOM to NOK. That's good for me as a NOK shareholder. But not so good (at least at on the surface) as compared to the alternative, which is QCOM operating as an independent entity. They have shown a technological, managerial and strategic genius. I, as an investor believe that I will reap more benefit from my NOK and QCOM investments if they operate separately. I see no monopolistic adversity to NOK or any other customer from QCOM. The only possible threats I can conceive of are supply restriction and/or price escalation. I see neither as a possibility. QCOM wants to sell more chips, and there is already a downward price pressure. So as a NOK holder, I am relaxed about having QCOM as a vendor.
If my NOK buys from my QCOM, what will happen is that NOK may be able to sell to verizon, VOD, Sprint, where they can not sell CDMA products because of quality problems. As a NOK holder, this hurts me a lot. This country (US), is where the bulk of the money will be made in telecom. I abhor the idea that NOK can not sell CDMA products to US CDMA operators. To understand my point, all you have to do is buy some QCOM shares.. The picture becomes so clear. There is so much money to be made by both NOK and QCOM if they operate separately and NOK uses QCOM as a vendor, just like GM uses suppliers (Fisher Body, Johnson Controls, Eaton, Bendix etc.). But if NOK buys QCOM, the bottom line will not be as profitable as the former alternative. It would be like killing the goose that lays golden eggs for its meat.
But then again, as a QCOM shareholder, I could be paid such an outrageous premium for my shares that I would jump at. $400 - 500/share comes to mind. But then obviously I would have sell my NOK shares right away.
s.a. |
