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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Uncle Frank who wrote (52972)	11/8/2002 1:50:49 PM
From: Eric L	Read Replies (1) of 54805

Frank, << I noticed you signed one of your posts as eriQ last night. I take it as a sign you are please with Q's non-Gorilla performance. >> I'm very pleased as opposed to the mildly pleased that I was Q3. For the 18 months pereceeding that I had been somewhat displeased in performance relative to valuation. << Eric, if Q is a Chimp, it's certainly the biggest Chimp in the jungle. >> Market cap wise, they just may be. AAPL, the classic "Chimp", is sporting a market cap today that is ¼ that of QCOM's and at some time in this decade Qualcomm's revenues will undoubtedly surpass Apple's. Qualcomm plays in a VERY big jungle. Worst case its a $125 Billion per annum jungle. << TFM cites some examples of making good returns on a Chimp. >> It does, indeed. Ya know, (as Jacobs Jr.) would say ... when I speak of Qualcomm as the Chimp of wireless, it is important to keep in mind that they are legitimately the local gorilla of QCDMA wireless. Going back to when we started discussing Qualcomm here there were 3 competing digital technologies and one entrenched analog technology. AMPS will be virtually extinct by 2005 and PDC and IS-136 TDMA will be virtually extinct by the end of the decade. That leaves only two technologies - GSM/3GSM and QCDMA - and Qualcomm is the gorilla of one of them and will derive a high margin revenue stream from the other. In addition Qualcomm is now doing exactly what Moore (in Inside the Tornado) or his partner Paul Wieffels (in Chasm Companion) suggest a wannabe gorilla should do when the technology whose architecture they control doesn't get chosen by the majority. They are going after new market niches where they have the capability to be a gorilla. One of these niches is limited mobility WiLL and another is mobile wireless in 450 MHz. These little niches could turn out to be big niches. - EriQ -

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