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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 154.49-0.9%1:25 PM EST
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To: Kent Rattey who wrote (15502)10/5/2001 4:32:57 AM
From: techreports  Read Replies (1) of 197369
 
Analyst Kevin Roe at Merrill Lynch believes Nextel's (NXTL) decision to enhance the iDEN wireless network (see 10:15 item), rather than deploy a 1X CDMA network, stems from its deteriorating balance sheet. "We continue to believe tht iDEN is a 'stranded technology,' and we do not believe that this upgrade is a feasible way for Nextel to keep up with its competitors," Roe said in a note to clients.

I own Qualcomm shares. I really want to believe that iDEN is a stranded technology and want to see Nextel fail miserably. Yet i have to ask the question, Nextel has been the only carrier using iDEN and they've got a ton of users. Nextel has been at the mercy of Motorola (since they are the only ones making iDEN, correct), but that hasn't stop Nextel's success at getting corporate users.

It would be like saying Qualcomm and CDMA2000 isn't a good investment because CDMA only makes up 13% of the market. People can't roam in other countries, yet that didn't stop CDMA going from 0% to 13%, so why would it stop CDMA going from 13% to 20%? Of course all this doesn't matter because Qualcomm will receive royalties from all CDMAs.

As for the reason Nextel chose to go with iDEN could be because of their deteriorating balance sheet, but even if Nextel went with CDMA, there balance sheet would still suck. Although it would be more relaxing to know that Nextel made this decision, because of their balance sheet, not because they don't like CDMA or something.
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