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Technology Stocks : The New Qualcomm - a S&P500 company
QCOM 163.32+2.3%Nov 21 9:30 AM EST
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To: kech who wrote (12862)6/22/2000 2:09:00 PM
From: A.L. Reagan  Read Replies (2) of 13582
 
One to two years can make a big difference. Longer time means lower NPV of expected royalties to Q.

Tom, your insightful analysis is appreciated in terms of framing some of the key issues, especially the gorilla game read that Q is the alpha male primate (sorry Al Gore) in the MC jungle, but perhaps only lead chimp in the DS jungle. (You may have reversed proprietary and non-proprietary in your post, but I get the drift.)

So it's actually a pretty interesting trade-off to ponder:

1. Would it be better to have both MC and DS modes hit the streets ASAP in terms of the NPV of the royalty stream, and possible QCOM DS ASIC sales; or

2. Would it be better to have DS deployment be delayed on the theory that this will increase the market opportunities for MC and thus the Q's gorilla power?

I tend to agree with you (and IJ's public statements) that #1 is a better answer in view of the various roadblocks the TDMA and GSM'ers have at their disposal to defeat incremental deployments of MC. But that then begs another trade-off question - to the extent that unsettled IPR issues with the Q motivates the TDMA/GSM'ers to hunker down a while with GPRS and EDGE rather than ante up (or, just ignore the Q for now and spin the bottle on litigation), to what extent (if any), if you are the Q, do you attempt to sweeten the deal? Or just let the chips fall?

As the Verve has observed, mightily complex. Many chess moves, many differing probabilities, many different possible monetary outcomes.

This will make one hell of a B-school strategy case!
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