Keep the Faith ...
Mqurice,
<< Royalties are being eroded with Nokia having swindled QCOM down to near 1% or 2% >>
Now wait just a goldurn minute! Nokia recently capitulated once again like they did in 2001. It's a Qualcomm message board tradition patented in March 1997, renewed in early 2000 and again in mid-2001. Any statement to the contrary is heretical, and since the inquisition has not concluded on these boards where many still wage a virtual holy war rather than converting their virtual swords to virtual plowshares, all that utter such should be drawn, quartered, sliced, diced, talked about derogatorily, and then burned at a virtual stake.
Nokia's doesn't even have 40% market share in handsets yet, and while ABI Research figures they gained a decent 1.8 percentage points of share in the last calendar year just concluded, Strategy Analytics (SA) figures that they only gained 0.9 percentage points, and only had a record 39.8% annual share in CY2008 -- and ABI even has them at less than 39% share for the year just concluded.
At over 16% share of the handset market -- almost 17% according to SA and only 3 to 4 percentage points lower than the share Moto had just a few years back -- Samsung, who promised in May that they would overtake Nokia in 2010 after they opened their new Vietnam handset factory is nipping at their heels and operating profit be damned, it's the creation of share driven scale that's important.
Nokia's smartphone share was hammered in 2008 as quality competition rushed into the no longer niche market that Nokia (along with Palm, and Microsoft, and DoCoMo) created and in 2008 they only had ~2.7x the share of their next closest competitor (RIM) and ~4.4x the share of market newcomer Apple who gave the smartphone market a requisite kick in the butt with the 2G iPhone and iPhone 3G by introducing an extremely effective implementation of a Touch UI. Nokia thinks they will be the leading manufacturer of touch UI based smartphones by this years now that Symbian OS v.9.5 and S605E are relatively fully platformized, but that remains to be seen and I certainly wouldn't make book on it (yet).
Of course, everybody with a modicum of properly directed mobile wireless faith knows that the only way Nokia'll be able to continue to be the dominant supplier of 3GSM handsets with greater than 2x the 3GSM handset sales of their next nearest competitor as the mobile world rapidly transitions to 3GSM, is to use ASSP silicon supplied by Qualcomm, and forget about continuing to master evolving access mode technologies and design their own 3GSM protocol stack in handset modems and having that Nokia IP integrated into ASICs fabricated for them to their specifications by TI or ST-NXP/EMP Wireless to retain that value add rather than transferring it, thus minimizing silicon cost, although R&D needs to be expensed.
Nokia may think their future is based on evolving into a major software and services player as complex software increasingly becomes a component of a mobile device but today Qualcomm generates more revenue from BREW than Nokia generates from its software and services group including what the new OVI portal generates. And now that the Symbian acquisition is complete and Symbian and S60 are soon to become open sourceware they shortly will have no revenue stream from S60 and they now have several thousand new OS and middleware software engineer's mouth's to feed. While the trend in this arena is clearly towards open source, RIM, Microsoft, and Apple, think they will have something to say about that and well they probably will. They will take a share of a smartphone hardware/Software market even if Nokia (and the Symbian Foundation's adopter base) and Google and (and the OHA's adopter base) dominate it.
<< Globalstar, Vesper, Leap, WirelessKnowledge, Wingcast, Graviton, 724 Solutions, NetZero, Cinecom, SnapTrack and others gobbled $billions ... Then the stash of cash was eroded by backing wrong financial horses instead of shorting them. >>
You forgot Unwired Planet (now Openwave) and Certicom, but HTC appears to have paid off, if not in equity value, at least in silicon supply to strengthen their commitment to Softie's OS.
<< Buying back shares seems dodgy too with QCOM failing to buy the bottom even with all their insider knowledge which should mean they can buy better than anyone else. >>
The only reason it's dodgy is that today there are more QCOM shares outstanding than there were when they started buying shares back. At the very least they've avoided major share creep due to option grants to Jacobs, Jacobs, Jacobs, Altman, Lauer, Rosenberg, Johnson, Lombardi, Bleckler, Keitel, Mollenkopf, Gilbert, Lederer, and the late but great underpaid Jha, et al.
<< QCOM is now about management rather than guessing market and technology futures. >>
I wouldn't get too discouraged by the fact that 3GSM HSPA Plus will be the Last of the CDMA (CDM/TDM) Mohicans, that CDMA is doomed to be Toast as attention refocuses on OFDMA/OFDM and flat network architectures, or that Qualcomm's Ultra Mobile Broadband (UMB) which retained some CDMA elements was stillborn for lack of interest in proprietary technologies and that Qualcomm no longer has a proprietary open ITU-Advanced 4G Access Mode Candidate to advance. Qualcomm is now fully committed to contributing to comittee-based collaboratively developed interoperability access mode and network technologies and standards development in 3GPP and four square backers of LTE and LTE/SAE Advanced. They back that up by being amongst those that have a robust OFDMA/OFDM patent portfolio and already boast Nokia as a royalty bearing LTE cross-licenssee.
And then there's always MediaFlo.
Look on the bright side.
Go Steelers!
Cheers,
- Eriq - |
