Interesting reading from Mr Fun from the NOK thread.
To: The Verve who wrote (3809)
From: Mr.Fun
Thursday, Mar 23, 2000 10:19
AM ET
Reply # of 3835
Verve:
It is precisely because Tero has spent a great deal of time researching
and following the wireless industry that he is negative about
Qualcomm. You make some audacious statements in your post. My
responses-
1. NOK will not only hold on to their market share and margins but
will expand them over 2-4 years. NOK has several almost
insurmountable advantages. First, NOK made more than 1 out of
every 4 handsets sold in the world last year. This gives them
exceptional economies of scale AND means NOK can demand and
get preferential treatment in the delivery of scarce wireless
components. Second, NOK leverages its technologies across
multiple chasses, multiple bands and multiple technologies - NOK
can change its manufacturing lines from one model to another in
minutes when everyone else - especially the ASIANs - take hours.
Third, NOK brings out 18 new phones every year, in every major
technology - no one else has shown the ability to constantly refresh
their product line like NOK. One cool phone does not make a long
term strategy. Finally, as long as the Asian competition buys Q's
expensive chipsets, their costs will be higher, not lower. We have
been waiting for the asian cell-phone invasion for 10 years and I
reckon we will be waiting a while longer.
2. NOK gains alot by not using Q's chipsets. For one, all of its
software and hardware designs can be ported to CDMA as long as it
retains the TI DSP.
3. Anyone who knows anything about wireless understands the
difference between CDMA2000 and W-CDMA. Q's patent claims
are not nearly as strong for W-CDMA as for CDMA2000(1X,3X and
HDR). And guess what - Ericsson and Nokia have significant IP in
the W-CDMA standard. And guess what else, most W-CDMA
devices will be dual mode GSM/W-CDMA. So if Q wants to make
chipsets for the W-CDMA world (and they do) they will have to play
ball with NOK and Ericsson. Good bye dreams of a massive cost
free royalty stream.
4. Sometimes the obvious answer is flat out wrong. I would argue
that NOK's future seems set with its cross platform positioning,
strong carrier relationships, global brand, and operational excellence.
Q's future is far less certain than you make it out to be - it owns
CDMAOne and CDMA2000, but what percentage of the world
market will that be? It has a stake in W-CDMA but so do ERIC and
NOK - it is very difficult to assess just what kind of royalty Q will be
able to negotiate or what share of the W-CDMA chipset market they
can capture. This is why Q stock keeps falling back to $125 after
every feeble rally.
... Bill in Boca ..... very long on Q |
