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Technology Stocks : Nokia (NOK)

NOK 7.030

+1.7%

3:59 PM EST

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To: slacker711 who wrote (2215)	9/19/1999 8:36:00 AM
From: tero kuittinen	Read Replies (11) of 34857

Labrador... it's way too late for any operator to switch now. The costs of building the networks were hideous and have to be recouped. I bet Nextel would give anything to turn back the clock and get another shot at making their standard decision. Probably AT&T as well. I don't get this confusion over the ASIC situation. Qualcomm is in the process of destroying the CDMA chipset market by attempting to turn it into its monopoly. VLSI becomes a dangerous competitor... and Qualcomm simply yanks their CDMA license. Is this a wise way to run a standard? By bullying and strangling competition? No wonder the new GSM chipsets are so much more advanced - free competition there guarantees rapid development. So the new GSM chipsets can offer stuff like one month of stand-by time. And people wonder why Nokia and Motorola make their own chipsets? Qualcomm can at any time yank the CDMA license from any other CDMA chipset manufacturer. How dumb would Motorola and Nokia have to be to rely exclusively on Qualcomm chipsets and give them total power over component pricing? It's not like Q can actually offer any unique technology. The most succesful high-end CDMA phones in USA are now Startac, 6185 and Touchpoint, only one of which uses a Qualcomm chipset. So much for the Intel scenario. Qualcomm forced Nokia and Motorola to build up their own chipset divisions by trying to play the Emperor of China. We'll see next year what that decision will cost. A tip: take a good, hard look at Qualcomm chipset order growth during the next couple of quarters. I'm having a hard time understanding that a Finn has to explain these principles to Americans, but here goes: I believe in free competition and open standards. I believe in Darwinian jungle of intense rivalry as the best guarantee of technological advances. I believe in companies that thrive under intense pressure. I'm not too impressed by hothouse flowers that are going out of their way to avoid direct competition. Stagnation is a child of seclusion. Qualcomm faced direct competition in CDMA network equipment market... and failed dismally. Qualcomm started facing direct competition in North American CDMA phone market last June. Three months later, the handset division is folding like a house of cards. And now you are asking people to believe that the chipset division will fare any better? Based on what track record? Q execs are a lot better at stroking Wall Street analysts over champagne cocktails than their Nordic counterparts. So what? Iridium was really good at charming pants off major investment banks. A fat lot good it did when they had to actually sell their products. All you QCOM cyborgs infiltrating this thread like extras from a remake of "Stepford Wives" - you are most welcome. But try to understand that not believing in the way this company conducts its business does not necessarily imply any gross mental defects. I was negative on Iridium when it hit 70 dollars. Many investors think that tripling share price in a matter of weeks is a sure sign that the company is on right track. Of course it isn't. It can reflect a variety of things. Including skills in snakeoil salesmanship. What I said two years ago still holds: CDMA appears to be heading towards a 20% market share around 2003-2004. It's a good showing from a niche standard. But any company basing its business entirely on a niche standard is facing compelling hurdles. A genuinely creative manufacturing whiz like Apple has a shot at making it against the odds. There are few if any signs in Qualcomm's recent history of real innovation and insight. The Q version of "vision" is a big bet on satellite telephones. Let's see how they intend to walk away from Globalstar without a dent in profit growth. Tero

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