Apollo,
Are there any other Qcom investors on this board, and what do you forsee?
I'm a QCOM holder though I encourage those that don't own shares to also contribute.
The big problem I've always had with Qualcomm is that the potential market is so large that it's truly difficult to know what the growth can be. (Nice problem to have, but still an investor's problem.) I still hold to the fundamental observation that, at the very least, the potential market is a cell phone eventually owned by everyone on the planet at least 8 years old. (Well, except maybe me. :)
In the 12-year time frame you suggested, it's really difficult to know how pervasive W-CDMA will be and the extent that its adoption will favor Qualcomm. There is also the question about how wireless transmission will be used and which segments are likely to be profitable enough to be the drivers that motivate Qualcomm's customers. How will data be used by consumers? How will it be used by company employees? How important will data transmitted between machines eventually become? And, of course, we can never forget that governments and politics also enter into the picture, sometimes to Qualcomm's benefit and sometimes not. Access to capital for Qualcomm's value chain is no less important which, at present, is limited among carriers.
Toward the end of the twelve years you mention, it's possible that handheld devices can start to become the "center" of consumers' electronic devices. (I think that's more likely than the television ever becoming the center of all electronic devices in the home, mostly because it makes sense to me that the most important aspect of the central device is that it must be portable.) Just as some laptops today attach to a large monitor and keyboard and digital cameras connect directly with printers and televisions, I see handhelds of the future whether in the form of a cell phone or a more comprehensive PDA attaching to desktop computers for everyday use by everyone in the family and business.
Beyond those dozen years, there are certain obstacles that will need to be overcome. Unfolding screens or holigraphic images will need to be developed to solve the inherent problem of screen size. Voice-recognition software or other solutions will be needed to solve the problem relating to the difficulty of using such small keyboards.
During such long time frames, the stock will inevitably be undervalued and overvalued at times. Over the really long haul, which is what my time frame has always been, I think the company's prospects remain terrific for considerably outperforming the market. Such a long-term mentality is definitely not in vogue these days, but that's nothing new.
--Mike Buckley |
