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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (2607)	6/13/1999 10:42:00 AM
From: Tony Viola	Read Replies (1) \| Respond to of 54805

Mike, In four or fewer words, what would be a description of Rambus's business sector that might produce a gorilla? Your current "Next Generation Memory" can serve. Or Revolutionary Main Memory, or simply Computer Main Memory. Tony

To: Mike Buckley who wrote (2607)	6/13/1999 2:34:00 PM
From: LindyBill	Read Replies (2) \| Respond to of 54805

Well Mike, Compliments of Ozeir"s email to Moore, here is our answer on what Moore thinks of Qualcomm: Ozeir.Nassery@ual.com writes: << Subj: Qualcomm: a Gorilla or a Prince ? Date: 6/10/99 7:43:24 AM Pacific Daylight Time From: Ozeir.Nassery@ual.com To: GeoffMoore@aol.com CC: LindyBill@home.com, MBUCKLEY@aol.com, kandy@candy.ultranet.com Hi Geoff, A few of us have a position in Qualcomm and we feel that the company truly is becoming a gorilla. But in one of your digests you stated that the company is not a gorilla but rather a prince in a market where Erricson is the king. I have done a lot of research and I have read some of the techie's comments in the Silicon Investor's web pages regarding your comments. The feeling is that the future of wireless will be using CDMA technology and Qualcomm is in the position of receiving licensing fees and royalties from every single CDMA phone sold world wide. Can you please take a moment and review this company and let us know in a little more detail as to why you don't think their future business model does not have the characteristics of a gorilla like MSFT or INTC. I know you are very busy person and I want to thank you in advance for your input. Ozeir >> Gang, As you guys know by now, I am not a stock-picker per se, so I comment on methods, not on specific answers. Here's the key question for Qualcomm. How much proprietary control did they have to give up over CDMA in order to get the Ericcson deal? I am not close enough to the situation to know, but I had inferred from the press coverage I read that basically they had to essentially open up the standard and relinquish control to get the deal. That's what you need to find out. Now, supposing they did, they still should have significant advantage in designing to the strengths of the standard--hence their ability to compete in a royalty game. But the G3 implementation that incorporates CDMA will, I am guessing, roll out sooner and faster in Europe than in the US. If that is the case, then I think the European vendors will have a significant execution advantage, hence my guess of prince for Qualcomm rather than king. But please note the assumptions I am making. Another plausible future might go like this. Qualcomm licensed CDMA but kept some Trojan Horse technology which can create a significant performance edge while still not violating the standard. Under this model, its products simply outperform the others, and it rises to king. I do not see how it can get to gorilla. The telecomm market has been sensitized to gorilla power by the PC market, and by Cisco's gorilla power in the data market, and I would be shocked if it had granted Qualcomm gorilla rights for CDMA. But, as I said, I do not have the facts here, just the models. Geoff My initial comment? Moore admits he has not done his DD, and is wrong, of course. LindyBill