Chaz, I agree that the Gorilla Game has a narrow focus; my impression is that the authors' had great expertise in software. But the characteristics of a Gorilla should have analogs in every high tech sector; they should have control of a critical technology with a high replacement cost in a sector that is experiencing hypergrowth. The resulting extraordinarily high penetration and gross margin numbers are the characteristics that allow us to confirm a Gorilla.
By that definition, I think we can only look at qcom as a Gorilla candidate - a kind of Gorilla fetus as it were. They have the critical technology (cdma) and are in an explosively growing market, BUT they do not have a large enough installed base of cdma infrastructure yet, and, as you well know, that will not be an overnight process. As a result, they generate meager 3% gross margins and have only a small share of the digital wireless market, which is in itself a small part of the overall wireless market.
The above is why I am not concerned about catching the current momentum which followed the Erickson announcement. When qcom starts exhibiting true Gorilla characteristics, their stock will begin a prolonged climb that will make many of their investors rich. I'm planning on being one of them <g>.
Therefore the likes of Northern Telecom (now Nortel Networks) and Lucents are Kings
I don't think so, Chaz. A King needs to have 2X sales of their nearest competitor, and you can't have more than one per sector. If my understanding is correct, they are Princes.
Learn from the past but don't focus there. Emerging gorillas and kings are the key
Agreed, but the birthing of a major Gorilla or King is a very rare event, which is why qcom represents such a unique opportunity.
This discussion was a good distraction, but I still have the Market Shutdown Blues.
Frank |
