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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 159.42-1.2%Jan 16 9:30 AM EST
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To: Rich Bloem who wrote (59695)2/3/2007 3:25:34 PM
From: JGoren  Read Replies (2) of 197271
 
One major characteristic of successful organizations is that it knows what its mission is and stays away from trying to do things outside that mission. Manufacturing handsets was not Qcom's mission. Manufacturing large quantities of a product such as handsets takes a different set of core values than developing IPR, software, and hard research * developement. Qcom only got into the handset business, and to some extent the infra business, because no one else believed in cdma and it had to guarantee to the carriers that the equipment would be available for the launch. Nobody got defrauded; nobody got screwed. I remember a lot of comment on SI at the time that the handset business was a money pit and losing money. At the time, the shareholders were glad to get rid of product manufacture so Qcom could concentrate on what it does best, R&D and chips. I think you just forgot what was going on at the time and are engaging in a 20-20 hindsight. I doubt that Qcom could have ever competed effectively in the long term in the handset business. Nevertheless, the business model does have its problems.

Qcom's business is still dependent on competitors, which is why its relationships are so touchy and often antagonistic. If Qcom made handsets and infra, it would have something to sell retail and particularly to the carriers. Now, on the other hand, Qcom's true customers--albeit somewhat indirectly--are the carriers and its relationships with them are generally good; the carriers drive the handset and infra manufacturers.
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