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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (24389)	5/10/2000 1:17:00 PM
From: mauser96	Read Replies (3) of 54805

Mike, we might say that it's digital phone technology that's in the tornado. CDMA is only a part of that tornado, since apparently GSM is doing well too. QCOM status as a gorilla is weakened considerably by it's distance from the purchaser of the end product. It means that the brand is with the cell phone maker, not QCOM. The cell phone makers will keep it that way. Trying to explain CDMA to the average user is hopeless- they are not interested and would have no way to tell that it wasn't just PR fluff. Companies using non CDMA equipment are deep into the sunk money trap.The longer they can delay, the longer before they will have to admit error, and the more chance that they can find ways around Qualcomm's IP. Eventually they will probably cave in but it may be too slow to sustain a rapid growth rate for QCOM. Royalties aren't enough, and it's the nature of IP's value to decay with time. QCOM needs to sell lots of ASIC. Personally, I have my doubts whether the public really has any big demand for complex data over hand held wireless, at least if it makes the device a lot more bulky or expensive. It's certainly going to be more bulky unless the problems of screen size and input can be solved. (Retinal scan, speech recognition?) E-mail and things like stock quotes seem more likely. Of course nobody really knows so it's all guess work. The latest paper issue of Red Herring has an interesting article on NTT DoCoMo - some of it's success could be due to unique Japanese factors (like a $700 activation fee for a new land line) but it's the closest glimpse we have into voice/data wireless. Their cell phones are small and affordable. I have no position in QCOM at this time. I'm not trying to rain on anybody's parade, just raising some questions. I'm also wide open for reasons to buy in again. Luke

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