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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 170.90

-1.3%

Nov 7 3:59 PM EST

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To: Ramsey Su who wrote (6879)	2/3/2001 8:41:44 AM
From: Webster	Read Replies (2) of 196546

Most Honorable Ramsey Su, I believe there are several major factors which have influenced NOK's past strategy regarding cdma. I also believe that Jorma is concerned about the future of NOK as the cdma competitive environment has significantly changed. As those analysts say, past performance is not necessarily an indicator of future success. This represents only my opinion and may conflict with many others. I believe in five years, the NOK story will be told in future MBA classes as the most recent decline of a major company, along with Europe's decline as a wireless leader. I think that NOK is in the second phase of their cdma strategy with the first phase ending (12-31-98) in complete failure. First let me say that NOK has done a brilliant job in the 1980's and 1990's with GSM, building world class phone manufacturing, brand name along with financial performance. With regards to their cdma strategy, I believe that NOK's past success has cause them their biggest problems. They missed their opportunity back in 1995 through 1998 to build their cdma foundation that would continue their world dominance for at least another decade. NOK suffered from the same success that MOT achieved with analog phones. Analog has seen a steady decline and will will one day be a memory. GSM and TDMA will have a similar fate. Sure GSM will be around perhaps for another ten years, but I wouldn't be planning any sequential growth from it. Since NOK is the number one brand in GSM handsets, they looked to their historic success to determine their future course of action with cdma. I believe NOK over looked their most important historic strength (not their pride) and that was their vision. When MOT was number one in analog phones, NOK was planning their GSM strategy by looking into the future as "what can be." Today I believe that MOT is in a similar class with AWE as one of the few unnecessary companies in wireless. NOK could suffer from this similar fate. NOK's biggest strength today is their brand name. I do not see them as a technology company nor a phone manufacturer. NOK is now chasing technology as a result of QCOM's significant lead in asic development. QCOM is reducing the bill of material with their asic, and increasing the applications they write on their asics. QCOM has changed the competitive environment with cdma by licensing many new entrants for devices as well as placing them all on a similar competitive playing field with royalties in the 5% range. They also provide a smooth transition in asic features so manufacturers can easily upgrade without major design changes. As a result of QCOM's presence in cdma there is and will continue to be significantly more competition in all aspects of cdma handsets as will there be with wireless appliances. If I was Jorma, I might get out of manufacturing of cdma handsets and build the brand name. I might also take the stand that NOK doesn't care which brand of cdma their customers choose as long as they move forward. Keep the gsm production line going for as long as possible. In a few years as GSM declines you can keep the local EU people working as some type of protectionism will inevitably be in place. I think that QCOM can help NOK become the number one brand name in cdma. They will also allow NOK to save face in the process of signing a 3G license. As long as NOK looks to the past their vision with regards to cdma will be clouded. FWIW. Thanks Web.

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