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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 163.33-1.0%Nov 25 3:59 PM EST

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To: Craig Schilling who wrote ()1/21/2000 12:25:00 PM
From: John Hauser  Read Replies (3) of 152472
 
Hey Q-techies, comments on this message.....

from YHOO thread:

A lot has been said on the boards about the HDR issue with regard to MCOM, and I'd like to throw my two cents in.

First, spectrum issues. Using the original analog cellular system, each voice conversation took up a single DS-0, which is a 64kbps circuit on a DS-1 (aka T-1). Since the bandwidth of a voice conversation is < 8kbps, this was obviously inefficient. So with newer technologies, we can pack 4 or more conversations onto that same DS-0.

So, let's assume that a voice call uses 16 kbps, which is realistic. In CDMA, this means that a single 128kbps connections takes the place of 8 voice calls, each generating revenue on the order of 10-20 cents per minutes. So the cellular operators must clear out some spectrum for use by data, or else share the voice spectrum. Either way, they are reducing the availability of their voice channels, which cuts into revenue.

Now, by improving compression, frequency algorithms, etc., they can gain some of this back. There is a definite limit to how far this can go, however.

The issue, in my mind, is not as much technical as it is a business issue. How much will they let the new business cut into the old business? Don't ignore the human factor. A group of executives in a cellular carrier who depend on and understand the voice side of the house may be unwilling to allow the data side a fair shot at resources, because of fear. And while this is usually a temporary situation, time to market is critical for new products like wireless data. The momentum lost due to internal squabbles may be an important factor in the success or failure of MCOM.

Second, the whole HDR - MCOM issue is an example of false dichotomy. I feel certain that there will be room for both, it's merely a question of which one serves which market segment. HDR may be the preferred choice for those with modest and infrequent data requirements, for which they would be willing to pay a higher rate, which means higher margins for HDR. Or a newer technology could supplant them both. For the moment, HDR is vaporware, and its future implementation is hazy at best. MCOM has the "first to market" advantage.

--------------------------------------------------------------------------------

Comments appreciated,
JH
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