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RESEARCH UPDATEWIRELESS INDUSTRY UPDATE
by: SpyderFerrari
15758 of 15830
CSFB TECH INTRA-DAILYJake Hindelong Thursday November 5, 1998
RESEARCH UPDATEWIRELESS INDUSTRY UPDATEMarc A. Cabi,
Wireless Data Application Development Heats Up
* Qualcomm is expected to announce in a press conference on November 10 a
partnership with Microsoft and the formation of a joint venture company meant to
focus on both companys' penetration into the wireless data device arena. We
believe that this is a competitive reaction by Qualcomm against current
development collaboration by several tier one suppliers.
* This news occurs on the backside of Motorola's earlier announcement to join
the Symbian venture, a partnership with Nokia and Ericsson and wireless data
applications supplier, Psion. We believe that Motorola's decision to join the
Symbian alliance clearly lends momentum to the Symbian venture.
* We believe that Samsung, which also appeared to have close ties with
Microsoft's CE, has slowly receded from supporting this application due to
issues surrounding Window CE's resource demands.
* We believe that ultimate success of operating systems for wireless devices
will be determined by current market share of devices in the field. We estimate
Ericsson, Nokia and Motorola to have a cumulative market share of nearly 70%
while Qualcomm has less than 5%.
* We reiterate our STRONG BUY ratings on Ericsson and Nokia. We expect Motorola
to benefit from the Symbian relationship but maintain our HOLD rating for other
reasons. We view the Qualcomm/ Microsoft venture as a long shot to displace
Symbian and maintain our HOLD rating on Qualcomm. (QCOM-$55-HOLD), (NOKA-$92
1/2-STRONG BUY), (ERICY-$23 3/4-STRONG BUY), (PSIOF-8-BUY), (Symbian-N/R),
(MOT-$54-HOLD), (Samsung-SSNLF-N/R), (MSFT-$105 1/2-STRONG BUY)
3Com (COMS-$34 7/8-STRONG BUY)Paul Weinstein,
3Com makes investment in Fibre Channel Start UpFY99E:$1.39, FY00E:$2.31
* Following the November 2 agreements with partnerships with Legato, Data
General and MTI, 3Com yesterday announced that it made an equity investment in
privately held Gadzoox Networks and will take a seat on the company's board.
Gadzoox is a leader in developing Fibre Channel hubs and SAN management
software. 3Com joins Seagate on the board and as an investor in Gadzoox.
* The 2 companies plan to develop new hardware and software products for the SAN
mkt in CY1999.
* We expect this market will experience rapid growth off a small base (estimated
at $150-200 mm in 1998) eventually reaching $1 to 2 billion in equipment sales
early next century. However, we strongly believe this will require the
development of an indirect distribution channel, an area of particular strength
at 3Com. (LGTO-$44 1/4-N/R), (DGN-$17 5/16-HOLD), (MTIC-$3 1/2-N/R), (SEG-$29
11/16-N/R)Cisco (CSCO-$65 9/16-STRONG BUYPaul Weinstein,
Update from Analyst MeetingFY99E:$1.46, FY00E:$1.88
* Focus of Cisco's analyst meeting on long term trend of the development of the
Internet economy. This trend is lead by Cisco and distinguishes the company
from its competition
* Cisco is at front end of a several hundred billion dollar rev opportunity as
volume of data traffic begins to outpace voice traffic. Service provider
customers are seeing the cross over earlier than expected. This sets the stage
for the building of data centric networks that will eventually carry voice for
free
* Financial guidance overall not changing; higher revenue growth supports higher
operating expense guidance. Cisco still sees more opportunities than it can
fund.
* Cisco demonstrated 'home of the future' technology in which all electronic
devices are connected to the Internet (PC, TV, lighting, appliances, monitoring
systems). Connecting more devices should positively impact network usage.
Posted: Nov 10 1998 2:12AM EST as a reply to: Msg 1 by YahooFinance
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