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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Eric L who wrote (52914)	11/7/2002 9:15:46 AM
From: slacker711	Read Replies (2) of 54805

In 27 months GSM wireless market share has increased by 22.3% (12.6 percentage points) while CDMA wireless market share has increased by 4.2% (½ of a percentage point) and in those same 27 months GSM has increased digital market share by 7.9% (5.2 percentage points) while CDMA has declined 7.9% (-1.1 percentage points). I have to agree with Clark on this one. I know that you frequently look at CDMA's overall marketshare among digital users to see progress, but I dont think this is an accurate reflection of the progress that CDMA has made. It is the equivalent to looking at the installed base of routers to determine of Juniper is catching up to Cisco (or the installed base of Intel's chipsets vs. AMD's when examining the microprocesser market). The overall market for handsets in '02 will likely be FLAT with '00. During that time period, CDMA unit growth will be up 25-30%. This growth might not have lived up to our expectations but it is pretty clear that CDMA has taken marketshare. If you wanted to look at overall revenue generated by handsets, CDMA's marketshare would be even higher since the ASP on CDMA handset is significantly higher than on a GSM handset. As for Q's value chain....it has indeed been decimated. However, if you look at the October 1st Soundview report, you will be hard pressed to see a huge distinction between the performance of the CDMA and GSM infrastructure markets. Both have been equally terrible over the last couple of years. research.soundview.com I also think that one problem with your list of Q's value chains is the hugely varied nature of the chain itself. CDMA has a much longer list of handset manufacturers than GSM ever did. Samsung, LG, Telson, Pantech, Sanyo and Kyocera have all been reasonably successful in the handset space. The smaller players in GSM were forced out of the industry long ago. Slacker

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