Gorilla and King Portfolio Candidates Message Board

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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: DownSouth who wrote (28885)	7/26/2000 11:50:00 AM
From: sditto	Read Replies (1) of 54805

<<This SPINCO = gorilla or royalty question deserves some more discussion, imo.>> The issue will/can not be decided until the 3G CDMA tornado has come and gone. It remains to be seen whether Spinco can build the best CDMA (any flavor) chip sets and extend their control of the architecture. In my mind the critical factor will be the strength of their value chain. I continue to believe the make or break factor is whether QCOM can play "Kingmaker" for the right 3G handset manufacturer. NOK is fighting tooth and nail to avoid a repeat of the PC market where INTC controlled the PC architecture and relegated the PC manufacturers to reseller status. On the other hand, I have to think some aggressive Asian entreprenuers would be more than happy to become the Michael Dell of 3G handsets and leave the handwringing to Jorma Ollila. QCOM should use a big chunk of their growing royalty stream to give their early partners every advantage in the marketplace. How far and how quickly would the NOK brand and value chain degrade if a competitor's Spinco-enabled handset delivered a wireless killer app that couldn't be duplicated on NOK handsets or on the non-CDMA handsets of other competitors?

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