A good July for Qualcomm
. . . . was clearly in the cards until that press release by management yesterday. I'm still optimistic we can get over 70 by mid-July. But above that? At this point, I'm not so sure. Of course, a Nokia "capitulation" would dramatically alter the landscape.
Kurt Hellstroem, Ericsson's CEO, raised serious issues today with respect to the European auctions. I'm seriously concerned about 3G issues generally. The whole sector could be in trouble. I'm beginning to see the "Holy Wars," as some like to call them, as resembling the U.S. Civil War, where the population was almost decimated in order to glean truth.
Like Qualcomm's stock, Nokia's is dropping these days too. I'm hoping the comments made by Jorma Ollila, Nokia's CEO, in Israel on Monday, are an indication that the "powers-that-be" may reach an agreement soon. This would help keep the sector and, more importantly from my vantage point, Qualcomm, a viable investment theater in the mid-term. I'm long on Qualcomm. But if it, as well as the entire telecommunications sector, keeps getting pressured, other sectors, such as fiber optics, make much more sense in the mid-term.
Governments seem to be greedily entering the arena and raising the stakes. It all kind of reminds me of the situation in major league baseball back in the mid-70's. What was the result of free agency anyway? Initially, freedom and better pay for players. Now, exorbitant salaries. But, more importantly, outlandish ticket prices.
Governments, particularly those in Europe, have a keen knack for slowing growth in the telecommunications world by wanting to get a piece of the pie. Europe is a mess in that area. But when I hear of $4 billion auctions for spectrum in Hong Kong and possibly the same in Canada, I begin to wonder if governments are going to make the costs of cellphone internet access prohibitive and, thus, a luxury. I’m a high end consumer, but I can live without such internet access and I can certainly live without streaming video that Qualcomm aims to offer me through a laptop at a mountain resort. I'm sure, though, that businessmen would pay for laptop usage on airplanes. Qualcomm offers SO much . . . .
Just porchin' (and "thinking under the influence"),
John |
