Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 165.03

+1.0%

Nov 24 3:59 PM EST

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To: JGoren who wrote (3484)	8/14/1997 12:06:00 PM
From: IKM	of 152472

When will this thread get it through its collective head that pricing is only very loosely related to cost in the short term, or that the retail price of the phones are only loosely related to the manufacturer's production capacity or inventory? The operators have been using promotional pricing for usage to get people in the door, same as the grocery store will advertise and sell turkeys below cost around Thanksgiving in order to sell all the fixins. The phones are being sold BELOW COST already. The incumbent cellular providers are a tough foe. The PCS providers are trying to stimulate the market. They are investing not only in equipment, but in a customer base that has a payback over time. The elimination of a rebate on a phone (Sprint, PrimeCo, who?) just indicates to me that the competitive value propositions allows them to do so. These are MARKETING moves. Only if Qualcomm directly offers a discount to the carrier from the contract price with a proviso that they pass on the savings or increase their commitment to purchase would it reflect otherwise. Without a priviso, the carrier would just as likely pocket the savings and increase their overall margin.

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