Hiya Chris, It's good to see you back, a dinkum grunt from the trenches with some real oil what's up out there. Xmas has been and gone, 1997 is nearly here and I am in Ewephoria over CDMA and Qualcomm.
Addi is worried about P:Es, but this remains irrelevant as the Es have all been used in building the business so of course the Es are small compared with price. At the beginning of 1996, there were still doubts all over the place, but in the brief space of a year, there has been enormous progress in the "going live" of CDMA.
Despite the idea that it is not the technical side that will determine consumers reactions, that is not true. The consumer might be blind to the technology - almost nobody knows what goes on inside a car engine these days, but it doesn't stop them buying the technology. The marketers job is simply to show the consumer how they will benefit from the technology. If they do a bad job, a good technology can crash, but it is really easy to sell a winning product.
Which is a very easy thing to do with cellphones. They buy, try and toss 10 stories if not good enough. Pretty soon, word of mouth is moving people to the best deal. At the moment, it looks like CDMA is going to clean up. Feedback is fast in cell phones. With cars you have to wait years to see if maintenance costs are high, how much it rusts and stuff. With cellphones it's buy, try and chuck!!
Prices are still way too high. NextWave Telecom based its plans on people choosing CDMA in preference to wired services. $0.25 per minute is pretty steep. $0.10 looks a little more reasonable and I guess prices will be heading down as systems mature and the customers crowd in.
The fact is that most people base their share buying on what is, not what might be, so until P:Es start to look normal, there is going to be a lull in the share price. If a knowledgeable value investor like Addi is hung up on the current P:E, how on earth can the casually knowledgeable investors risk taking it on?
It's not surprising that San Diego is the hotbed of cell phones. Qualcomm's home base. Best place of all to attack Qualcomm and also for Qualcomm to show off its wares.
I guess most people in San Diego will have a cellphone by the end of 1997.
Let the marketing wars begin.
Whhhhhheeeeeeeeeeeeeeeee!!!!!!
Maurice
Happy 1997 to all the people who have contributed so much to this forum over the year. |
