DS,
This is separate from my other post because it's at the core of gorilla gaming.
To pharaphrase you, you feel that Spinco is the Gorilla of CDMA ASICs because of the patents that are essential to manufacturing them. On page 55 of TRFM there is a quadrant showing the relative power of product categories in hypergorwth markets. (It's somewhere near that page number in the original manual too.) The ASIC category is in the lower, right corner, meaning ASIC have proprietary architecture but low switching costs. Due to the latter, ASICs producers don't typically play a gorilla game.
Explaining that on the next page in TRFM, the authors write that products in that lower right category "are readily substitutable." I imagine your point that Spinco owns patents that are "essential" to producing CDMA-based ASICs renders those ASICs NOT readily substitutable.
The definition of "readily substitutable" now needs to be fine tuned a bit to have any value for us, the investors. As an example, is the reason Sprint and Vodaphone stopped selling Nokia's CDMA phones which contained chipsets manufactured by Nokia because it is their ASICs containing those chip sets that are not working well enough, and as a result are not "readily substitutable?"
If you come back to me and tell me that I really do "get it," the first thing I'll do is wipe the sweat off my forehead. The years of being a carpetologist really come back to haunt me in trying times such as these. :)
Seriously though, if the above stuff is accurate, it's important that all of us understand that CDMA-based ASICs are in a completely different category insofar as some of the most important aspects of Gorilla Gaming are concerned. If CDMA-based ASICs really are no different in that they are as readily substitutable as all other ASICs, then it's equally important that we recognize that the ASICs portion of Spincom's business model is a royalty game, not a gorilla game.
Which is it, fella?! :)
And I can never say often enough about how much the carpetologists of the world (both active and retired) appreciate that all you folks with technical careers are so patient with us.
--Mike Buckley |
