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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 163.32+2.3%3:59 PM EST
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To: Gregg Powers who wrote (12192)7/11/1998 2:31:00 PM
From: dougjn  Read Replies (1) of 152472
 
Gregg -- I think you are over estimating the risks facing Globalstar and understating those facing Qcom.

The questions with Qcom are no longer whether CDMA will work or whether it will flourish. It does, it is, and it will continue to. So Gstrf's bet on CDMA, while perhaps a visionary longshot when it was first made, is now a sure thing. (Their bet on Qcom's ability to turn out handsets without glitchs, in huge quantities and on time is however a bit worrying.)

Qcom's issues are whether it can increase its manufacturing efficiency and quality fast enough in a fiercely competitive market. With other handset makers breathing down their neck. I agree with you that it can; but there are risks. Qcom does seem to be absolutely world class RIGHT NOW in CDMA ASIC designs; their new 3000 chipset looks lovely.

Gstrf has much less competition. It will be the low cost producer of works everywhere cell phone service. There remains the risk that there will not be enough demand at the price. It's a somewhat new market (cell phones certainly are not, but premium priced go everywhere phones and service are), but no longer a venture capital level risk it seems to me. The key thing is the lack of competition, for some while.

Of course there is the risk of rockets blowing up or going off course, but that is really only a delay risk. Again, with little competition to steal away customers. (What there is is much higher cost.)

So I think your relative assessment of risks is not right.

Doug
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