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Technology Stocks : Texas Instruments - Good buy now or should we wait?
TXN 191.57+1.3%Jan 16 3:59 PM EST
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To: slacker711 who wrote (5847)4/15/2002 2:53:50 PM
From: Steve Lee  Read Replies (1) of 6180
 
Here in Europe many people already have a 2.5G handset. I have two of them and hardly ever use them. About the only time I can't get net access is when I am driving so don't see the point in paying through the nose for cellphone bandwidth.

It is useful and cost effective for some people, but certainly not mass market.

If the data charges come down then it's a different story, but then where are the profits? About 80% of the population (and I don't just mean adult population) have at least one mobile phone in my country. The networks are highly loaded and occasionally too busy to carry additional calls. Yet they don't make a profit.

At some point, the bondholders and stockholders who have been subsidising the subscribers run out of money and the services have to justify their true cost, rather than the subsidised cost. Look what has been happening in fixed telecoms and ISPs. Wireless could be next. Prices up, usage down and we find equilibrium at a point where capacity no longer needs to grow rapidly.

All said and done, bandwidth and mobile phones (and their components) are commodities. Commodity producers don't make consistent large profits that justify TXN-sized multiples.
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