Rick, your concern about the overall market and its impact on tech stocks, including QUALCOMM, is well founded. However, it would take a major calamity of world proportions, such as a war in the Middle East or an attempted invasion of Taiwan, or a terrorist access to nuclear weapons, or another doubling of oil and natural gas prices to stop further progress in the stock markets.
Even if the stock markets in general trade sideways, and even if consumer spending drops a bit, it seems hardly likely that such events will have much of an impact on demand for wireless communication equipment. In looking at demand, one must look at worldwide demand, and particularly at developing countries where there is so little wired infrastructure that wireless is the ONLY feasible solution. I think this factor is not well understood by many influential investment analysts. The U.S., with its very high quality (though antiquated) wired structure, is not a good model for the rest of the world. There is no way the Chinese or Indians can possibly accommodate their communications needs with anything but wireless, and CDMA is the lowest cost technology from the point of view of infrastructure as well as spectrum requirement. The same is true for nations such as Russia, Indonesia, and even Japan to a certain extent.
It is, nevertheless, possible that GSM could increase its dominance, but in order for GSM to succeed, it will require non-economic measures, such as exercise of political influence or the provision of undetected gratuities to key officials. These are momentary problems. QUALCOMM should be considered not for momentary profits but for long term gains, which will be substantial. It will be interesting to see if anything comes of the meeting in San Diego between Irwin Jacobs and the Chinese this week.
Art Bechhoefer |
