Ahem... I suppose even Merlin, like Homer, nods occasionally... <g>
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. The sacred message reads as follows:
<<To: Uncle Frank who wrote (832)
From: Mike Buckley Thursday, Mar 25 1999 11:26PM ET
Reply #833 of 7319
I hope everyone noticed that Ericsson and Qualcomm came to a major agreement today that will enable customers to more quickly adopt the CDMA technology. The two companies agreed to support one common standard. A lot of potential customers were holding off on choosing one technology over the other until the suit played out. Now that the suit will never get to court, let the adopting begin.
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]. Gorilla Game devotees will take note that the authors recommend waiting to invest in enabling technologies until the tornado forms. If you're not familiar with CDMA, it is an enabling technology. Ericsson estimates there will be 16 million wireless handsets sporting CDMA technology in 2001.>>
Now quite possibly Merlin has developed more sophisticated GG skills in the interim, but I submit that what the early G&K Qtips (and the street) acted upon was a belief that the chasm had just been crossed, meaning that there were now no substantial worries about whether CDMA would be adopted widely.
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. 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--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.
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? 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?
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 price. For example, Merlin and Stew have repeatedly claimed that the resolution of the TV Guide lawsuit is simply not that big a deal for GMST, and so we shouldn't stress it so much. They might be completely correct, but the market might still be made up of Lindys, who will be skeptical until the suit is settled. A settlement would then trigger a sharp upward spike in the price of GMST regardless of its actual impact on the company's fundamentals...
thoughts?
tekboy |
