tekboy,
I've got a couple of quibbles with you. First, stop holding me accountable and second, don't you know that doing so delays my much needed sleep? :) ROFL! Keep up the great work in the folder!
MB now says, "I think the Ericsson deal at the most signified the start of the tornado, not the chasm.... I've never taken the time to determine when CDMA adoption might have crossed the chasm."
Checking the scriptures, however, we can see that what he posted AT THE TIME was something different.
You're absolutely right, and I'm truly humbled by the number of times that post has been presented here. To sort out the apparent contradiction might be a help, though.
My post dated March 25, 1999, said: I'm sure we'll here from Chaz who has already posted in the AOL folder that THIS NEWS IS EQUIVALENT TO THE PRODUCT CROSSING THE CHASM [emphasis added].
It wasn't me who said the settlement was equivalent to the product crossing the chasm. It was Chaz (actually, Cha2 aka gdichaz and not to be confused with our other Chaz) who wrote it in another forum. I simply mentioned his thinking in this one and gave him credit for it. It's not that I'm trying to point the finger at him (he knows how much I respect his thinking), but we gotta get the facts straight about who we attribute the statements to. :)
As for the change in QCOM's business model, I'm not sure exactly what MB means. Certainly it was always the future CDMA royalty stream that so entranced the early G&K Qtips, not the infrastructure or handset business, so selling off those divisions would not have been a big deal to them.
I agree that your thinking might be true for some but not for others. There were (are) a lot of people who felt the infrastructure and handset businesses were vital to the proliferation of CDMA and, thus, the success of Qualcomm's royalty stream. Some people who have given it a lot of thought still think it's a mistake to sell the handset business.
If he means that THE STREET changed its mind about QCOM because those businesses were shed, and THAT was what triggered the discontinuous behavior of the share price, perhaps
What do you mean by the discontinuous behavior of the share price?
but I'm not sure how one could separate out the influence of the infrastructure sale from the remainder of the Ericsson settlement, since it was simultaneous.
The two were simultaneous, but if there were a lot of people like me who weren't particularly knoweldgeable of the infratstructure business at that time, its importance wasn't grasped until much later when we did our research. The real essence of the agreement is that it fostered product adoption of CDMA by bringing Ericsson in full support of it.
In gorilla-game theory, it was a secondary issue, far less important, that the infrastructure business had been sold. We could argue that putting that business in the hands of Ericsson helped foster CDMA growth at a faster rate than leaving it in Qualcomm's hands, but I still think that's less important than the issue that Ericsson moved from its role as combatant to its role as partner.
All this raises, for me, still another interesting question. Is it possible that there is an ACTUAL PROGRESS through the GG stages (chasm, b.a., t., etc.) that occurs in the real world, but ALSO a PERCEPTUAL PROGRESS that occurs in the minds of investors and drives the share price?
Absolutely! (My opinion.) As the product adoption progresses through those stages, more and more invetors become aware of the product and the company that makes it. That fuels the stock's supply-and-demand imbalance that tilts in favor of the shareholders and drives the price up.
In other words, could both the new Merlin and the old Merlin be correct--with CDMA having crossed the chasm for real well before March 99 but with public recognition of that fact occurring only with Ericsson deal?
Having already addressed that there is no new and old Merlin, :) I'll move on to the last half of that thought. In my mind, the understanding of the term, chasm, is held by so few that it doesn't enter into the realm of being an influencer in the scope of "public recognition."
If so, this would have very important implications. It would mean that we should pay attention to BOTH the actual GG progress AND the perceptual GG progress--because the former will drive the fundamentals but the latter the stock
That's too close to attempting to time the stock market for me. I'll stick strictly to watching the fundamentals and let the stock go where it will over long periods of time.
--Mike Buckley |
