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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 165.61+0.3%11:16 AM EST
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To: Sawtooth who wrote (36809)7/22/1999 2:29:00 PM
From: Ruffian  Read Replies (1) of 152472
 
Tero, Still The Same Rap>

roddy
by: tero_kuittinen
7157 of 7161
What the entire telecom pundit crowd has consistently underestimated is the handset upgrade market. The
number of people upgrading their handsets every 12-18 months keeps increasing. This is not your father's
PC market - handset manufacturers have actually figured out how to get people to shell out cash for new
models year after year. That's how you run a consumer product company - by adding features that change
the definition of what is an adequate product.

GSM subscriber base hits 200 million next winter - when internet phones come out, that's where the
upgrade dough will come from. Nobody can predict the size of the smartphone market. But internet phones
will only need to appeal to 10-20% of the existing subscriber base and you can kiss your average sales price
projections goodbye - the price erosion is not going to be anywhere near 20%.

In one sense your point about declining phone prices is on the mark. Companies with less than 10% of
global market share are going to start gushing red ink one of these days, facing the impossible task of
matching the volume advantange of big manufacturers. According to an Alex Brown estimate, the price
erosion of CDMA phones will be bigger than that of GSM phones every single year from here to 2003.

Tero
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