Qualcomm will only become the "wireless" gorilla if cdma2000 becomes the dominant end to end technology (not just radio interface) deployed in third generation wireless, since 2nd generation wireless will most certainly give way to third generation (despite the fear and trepidation that it won't).
I think it should be Qualcomm's mission to get CDMA2000 deployed by as many carriers as they can. This will give Qualcomm a huge advantage in the ASIC business. Because they dictate the new standards, which no one else could copy. That would be a unique benefit or competitive advantage only Qualcomm would have. Although even if Qualcomm gets say 40% of the market (carriers) to use CDMA2000, what would stop them from switching a few years later to something else? Second, it would probably be easier for Qualcomm to push BREW, however, there is nothing to stop CDMA carriers from using say Java (sprint).
Latin America is the next major breeding ground and Qualcomm should get it's foot in the door quick before the GSM crowd takes over.
Nokia and the other major infrastructure companies don't want to give financing to the carriers. I think Qualcomm should finance the #1 carriers in most of the larger LA markets. If the big carriers go CDMA2000, i think the smaller carriers will follow.
personally, i would like to see QCOM's licensing and royalty business spun off as a royalty trust, which could deliver royalty payments to shareholders in the form of dividends. that would discourage Jacobs from blowing more shareholder money on harebrained schemes like Netzero and Globalstar. even regarding cdma2000, i believe their original projections were for something like a 40% world market share. i have doubts that they will achieve satisfactory returns on their investments there on a considerably smaller market share. the WSJ had an article a while back saying QCOM's earnings the past few years have been reduced some 30% due to writeoffs of this sort. it is a shame to see a solid royalty stream go to waste on unprofitable ventures.
Ya, but their investment in Nextwave just made us 600 or so million, right?
There is no way cdma2000 will become the dominant technology. Also what do you mean by end to end and not just the radio interface. Since we both agree that wcdma will make up at least 75% of the market do you not feel Q can dominate the wcdma ASIC market in addition to dominating cdma2000 therefore becoming the wireless gorilla.
Qualcomm might end up dominating the WCDMA ASIC market, but that still doesn't make them a gorilla. They don't control the standard. However, this is VERY important to get the most marketshare. I'll talk more about this later on, but if Qualcomm gets like 70% of the CDMA ASIC markets (CDMA2000 and WCDMA), this makes it much easier for them to push new technologies such as BREW or Snaptrack. If these technologies become popular, then yes, Qualcomm may become a true gorilla.
i could say the same for MSFT, although IMHO they have been more successful than QCOM in their investments subsequent to their original cash-cow-establishment efforts. however, i suspect the X-box venture may be a boondoggle. i would rather see MSFT establish a dividend than blow cash on such ventures far from their core competencies.
Good point, even Bill Gates and company have made some bad investments. I still have lots of respect for Bill Gates and all the wealth he has created for Microsoft shareholders. I wish Bill Gates ran Qualcomm and Gemstar. ;)
I try to forget about Microsoft's 5 billion dollar investment in ATT and the many other cable companies which produced nothing and many of those companies chose competing technologies like Liberates' and Java. |
