Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 169.27

-4.8%

Jan 12 3:59 PM EST

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To: grinder965 who wrote (106315)	10/6/2001 10:19:06 AM
From: pcstel	Read Replies (2) of 152472

grinder Wireless voice services becoming a commodity would be great for Q! Might not be great for a carriers APRU but for Q it means more phones are being sold. Very short term thinking! The financial health of your Service Providers is your life-blood! Commodity pricing in wireless leads to much lower ARPU.. Which in turn leaves SP with lower margins.. Lower Margins means less money for network upgrades.. (Like 1X). No system upgrades means fewer reasons for the users to upgrade their phone from old technology to new technology. Fewer reasons to upgrade means fewer phones sold. Less chips from Qualcomm, etc... In countries like the EU where there is only 1 technology.. Everyone operates on a level playing field.. There is no ability to commoditize wireless because capacity is regulated by technology and spectrum, with the help of the govts. And the Network Infrastructure Providers come up with some "Gee Wizz" addition like SMS, WAP, or GPRS every couple of years to stimulate a new round of handset upgrades by the consumer. Which also provides additional revenue generation opportunities for the Service Providers, without trying to turn their main revenue stream into a commodity. Wireless as a commodity is not good!! It is still a very financially intensive business to build out the network infrastructure in order to provide service. When operators can no longer achieve a ROI on their investment due to commoditization.. Then the build-outs/upgrades will cease. Just look at Nextel!! Here was the case everyone was waiting for.. VZ and PCS had deployed CDMA and lowered pricing to a point that Nextel had to stay competitive by lowering pricing also. Nextel realized they would lose the war on a capacity basis.. So they finally yelled "Uncle" and planned a 1X overaly. This was CDMA's crowning achievement. Then they looked at what the commoditization of wireless had done to their business, and decided that the costs of further high cost network improvements might be detrimental to their company's future. So they have opted out for less costly upgrade path to try and increase their wireless voice capacity! PCSTEL

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