Tracking emerging tornado(es)............
With the Nokia capitulation, I had asked when Qualcomm's many achievements in the marketplace would translate into substantial revenue/earnings, hopefully then followed by an increase in share price.
--MB recommended returning to TRFM. Moore recommends asking 4 questions when tracking the status of an emerging technology market, so as to determine whether a tornado can take place.
1. Can the value chain develop into a tornado mass market?
2. If so, what conditions are currently holding it back?
3. Are these constraining conditions likely to be removed?
4. If so, when is the last remaining constraint likely to be removed, and by whom?
I guess I would hope that 2.5G will represent the next tornado for Qualcomm. More handsets and other devices, with each registering a royalty to Qualcomm, and hopefully the majority employing Qualcomm asics resulting in additional revenues.
Conditions holding back the 2.5G tornado start with the lack of networks............Verizon, and especially Sprint, should roll out by mid 2002, I would think. Sprint seems to be the most keenly driven to take advantage of the benefits in competitive advantage offered by 2.5G. Korea and Japan should be in full swing by then. Handsets for 1xRRT are available commercially now, in greater variety by a year from now. I read somewhere that Compaq has built-in wireless in a notebook available now; hopefully, more common to have built-in wireless modems in laptops sold by next summer. Hopefully, Palm and other PDAs are progressing accordingly. At this point, it seems to me that the "fixed wireless" modem market is moving very slowly, and may not be in full stride yet even by mid 2002.
The Nokia capitulation puts the final major blessing on moving forward with next generation CDMA of some variety or another (perhaps similar to when IBM blessed MSFT and INTC in the early 80s, for the PC value chain to take off).
Impetus for a consumer to want 2.5G would be to be able to surf the internet or download more quickly, ie 100-300 kps. It would seem this would be most attractive to the business professional market, for email availability, anywhere, anytime. Secondarily, perhaps a variant of "Instant Messenger" could drive 2.5G among adolescents and young adults.
So based on this limited vision (by me), I guess I would envision early adoption by late 2002, and more widespread adoption over 2003-2004. Therefore, we see a tornado, with a doubling in revenues or sales of units, 12 month annualized by late 2002 or by mid-2003.
That's my conservative WAG.
Merlin, what do you think, and what do others see as the last remaining constraint?
Apollo |
