The AT&T/MSFT deal may have little benefit for QCOM because QCOM is wireless and this deal simply promotes a faster baud rate for wired communications. To the extent that Windows CE becomes the dominant system for smaller applications, then I would agree that there is some help. Not being an engineer or software specialist, I wonder if anyone can explain why CE is so great, and conversely, why some other system, such as that used by 3COM, or even the robust DR-DOS wouldn't be work better.
As for the deal itself, first, it hinges on AT&T receiving approval to gain local access through cable connections. If approved, then AT&T will be in the same position it was in when it bought McCaw Cellular and gained a dominant position in old-fashioned cellular. In both cases, AT&T is acting true to form by paying far too much, but being able to get away with paying those prices through the ease with which it can raise money in the capital markets and the favorable tax treatment any corporation gets (the taxpayers effectively cover 34% of any acquisition costs, including interest on any debt created).
Microsoft, meanwhile, gets the privilege of hobnobing with the establishment, but its return on investment could prove elusive, particularly if AT&T keeps its promise to maintain an open system, open to any provider of set top boxes. The way the deal is set up does not encourage either AT&T or Microsoft to become low cost service providers. So where is the competition? Wireless for one, and CDMA in particular. Particularly when broadband CDMA becomes available, it should be possible to undercut wired systems (no pun intended). After all, it takes just a few good tornados, hurricanes, or even thunderstorms and fallen trees, snapped lines, etc. to explain why wired technology is getting rather obsolete. Art |
