Clark,
<< Lies, damn lies and statistics. >>
I beg your pardon.
<< Quoting the way you do the percent market share definitely falls into the last category. You'll actually find this trick in books on how to manipulate statistics to say whatever you want. >>
I didn't find this in any book on how to manipulate statistics, Clark. As a vocational matter I started using source material from EMC, In-Stat, Strategis, and Gartner in 1995 to forecast for the sales side of my wireless business unit because projected adoption by technology determined not only the quota my business unit was assigned and just as importantly it also determined budgets for people resources particularly on the technical support side.
That vocational assignment had a fortunate investing consequence. In the process of preparing a 1 to 5 year forecast in the fall of 1998, the hypergrowth of cdma became apparent as did the relative decline of GSM and IS-136. This of course was coupled with the formalization of cdma as the air interface(s) of UMTS the preceding January and the ITU's mandate to Ericsson and Qualcomm in November to settle their differences or forever forget any flavor of cdma in any ITU IMT-2000 standard. And oh yeah, I'd just finished my second read of "The Gorilla Game" - the game that is banned from what Maurice calls "The Sacred Stream of Purity" - as well. As a consequence In December I folded a 3 year long position in NOK (a "prince" at that time) that had appreciated 300% and used the proceeds for a decent position in QCOM and enjoyed all of that 2600% sleigh ride.
That by the way was the last wireless forecast I submitted due to a change of assignment to another industry which brought me out of lurk mode on the various wireless threads. I no longer have access to the original sources from the research houses and now have to scrounge abstracts from publicly available material but I do know where to look for that material, and I became familiar with the detail (as in the devil is in the detail) from 4 years of immersing in it for the better part of a month every fall for 4 years.
<< 1) Anytime you have a group growing rapidly, and that group is divided up into a very small but rapidly growing subgroup (call it X) and another, very large but modestly growing subgroup (Y) you can get a situation where the 'market share' of the smaller group could be falling. (i.e. whenever %GrowthX/%GrowthY<SizeY/SizeX) Given that historical evidence says that percentage growths are much more constant than size this loss in market share is misleading. (At some point the ever shrinking SizeY/SizeX becomes smaller than the much more constant ratio GrowthX/GrowthY - at that point you get a 'minimum' market share. See point number 2) Essentially by the way you quoted data you were missing positive acceleration in market share. >>
Clark, in all due respect, you have not been reading my posts to this thread.
If YOU would like to take the time to abstract and provide statistical material for this thread on comparative technology adoption and take an active roll in discussions of "The Gorilla Game", we would all be delighted. In the interim I'll continue to do what I have done here virtually every quarter since the beginning of 1999 and that is to update market trends and technology adoption statistics for wireless.
In so far as my financial health and welfare is concerned that is a lot safer than confining my ongoing DD on wireless to the "All Cheerleading - Moderated with Rules Qualcomm" thread where even the mention of Tero Kuittinen's name (not to mention "The Gorilla Game") is banned, and where one would easily garner the impression that cdma technology adoption is considerably greater than it in fact is, that 3GPP2 3GSM WCDMA is a "flawed" standard, that "GSM is Toast", "GPRS is Toast", EDGE will never "see the light of day," and China Mobile, China Telecom, and China Netcom will adopt cdma2000 because its the "best technology".
Using the subscriber metric, cdma growth abruptly hit the wall Q1 2000, despite the "law of big numbers" affecting GSM. In 2000 and 2001 both IS-136 and GSM experienced a higher rate of growth than cdma. If you can "manipulate" any "statistics" to show different I would sure like to see em.
Now on the upside, and relative to your "point number 2)" above and as reported here:
Message 18123336
>> After 2 years of a growth rate trailing both GSM and TDMA and based on subscriber net adds for the first 9 months of this year, CDMA is currently growing at a CAGR of 27.22% compared to a CAGR of 21.35% for GSM and a CAGR of 18.86% for TDMA. <<
<< 2) You talk of QCDMA's loss of market share in digital. But that is only because you conveniently picked your endpoints. Using your own data it is apparent that more recently QCDMA has been gaining market share. Essentially they just passed through their minimum as described in number 1. >>
Clark, I didn't CONVENIENTLY anything and I didn't use MY (raw) data (although the calculations are mine). I used data from CDG (official scorekeeper for cdma) and from EMC Cellular (official scorekeeper for GSMA) who coincidentally has the most sophisticated and most highly regarded cellular subscriber database in the world. When YOU submit numbers here feel free to pick any beginning or endpoint you prefer.
... and yes the data does show that "more recently QCDMA has been gaining market share". That's what it's there for. It is a positive trend reversal. As you probably know there are more than a few long-time contributing regular participants on this thread who have a significant long holding in QCOM. I happen to be one of them so I'm pleased about it. Perhaps others are as well.
That said, you'll also notice that although cdma market share is increasing it is NOT at the expense of GSM yet and it may not be in the near future as the majority of IS-136 subs migrate to GSM over time and the same for PDC - if they don't churn, and in addition AMPS subs have been and are increasingly migrating to GSM now that GSM is the "fastest growing technology" in the Americas not only in subs but in carrier technology adoption which underpins sub growth. This of course, could be offset by cdma sub growth at Unicom and elsewhere in Asia.
<< As for the value chain, several comments: a) You have conveniently left off the Samsungs of the world >>
No, if you were following along you would see that I hadn't. Samsung and LGE were, however, excluded from the list of comm equipment suppliers because they are not publicly traded in the US and consequently its a bit difficult to get comps for the data I provided and of course like Siemens or TI which I also excluded the majority of their sales is from other than wireless.
In terms of trying to draw a bead on Samsung I established the "Samsung and Wireless" thread here on SI for that reason. Feel free to contribute to that thread as well.
Samsung is certainly a key member of Qualcomm's value chain and of course is Qualcomm's largest customer and this is primarily due to their robust handset business which is made up of 59% GSM, 36% CDMA, and 5% TDMA in terms of unit shipments and the GSM & TDMA % grows each quarter. As for wireless infra Samsung for all its contributions to the commercialization of IS-95A/B/C is a relatively minor player.
<< b) For the data you provided you are really comparing the network providers (lousy margins) with the handset providers (ok margins) but as pointed out in a) you didn't include the QCDMA handset providers. >>
Since when is Motorola not a QCDMA handset provider? Number 2 in the world to Samsung last time I looked. It happens to be rather difficult to get meaningful data other than unit shipments on LGE, Kyocera, Sanyo and even Nokia who trail Samsung and Motorola, but if you would like to take a shot at it we would all appreciate it.
I was, however, really looking at the gear providers in the context of my point about the deteriorating condition of the gearmakers and its significance
Infra is tough right now. Nokia is the only profitable company right now on the network side of the business and I would hardly classify them as a member of Qualcomm's value chain. This affects R&D efforts. It affects resources available to commercialize cdma2000 Release A, 1xEV-DO, 1xEV-DV, cdma2000 Release A and 1xEV-DO in IMT-2000 core spectrum, and GSM1x.
<< c) There is nothing that says that the rest of a Gorilla's value chain has to be making a killing. >>
No there isn't, but were not talking about "making a killing", we are talking about getting killed, and setting priorities for resource allocation.
<< Certainly not true of Microsoft which is indisputably a Gorilla >>
Indisputably.
<< ask any box provider but Dell >>
That's the whole point of "The Gorilla Game". In recent memory, Dell was once #2 Prince to Compaq's #1. now they are King.
Same is true of Nokia which was once #2 Prince to Motorola's #1, and a bit player in infra compared to King Ericsson.
Kings share many of the benefits that accrue to Gorillas and as we have learned, in tough economic times are capable of increasing market share while maintaining profitability.
<< Eric - Lies, damn lies and statistics. >>
Clark - we look forward to YOUR ... whatever?
Thanks for contributing here and I'm looking forward to solid earnings after todays closing Bell.
Best.
- Eric - |
