To: David Wiggins who wrote (6062 ) 7/25/1999 4:09:00 PM From: Valueman Read Replies (1) | Respond to
What is so confusing about QCOM/Telital/Ericsson is the supposed phone orders from the service providers as compared to the manufacture rate. From a conference call so many months ago. Elsacom said they had something on the order of 25,000 phones ordered and they were increasing that each week. TESAM said 60,000 phones had been ordered. TESAM would use both CDMA in South America(initial rollout) and GSM in Eastern Europe and France. I know that Airtouch is banking on some 30,000+ industrial type users straight away, so let's figure they are ordering 30,000 phones. If TESAM splits it 50/50, that means a total of 55,000 GSM type phones would have been ordered and some 60,000 CDMA phones. Why then do the manufacturers drag their feet? I follow QCOM quite closely, and I am certain they would love to have another $60 million in phones sold in the quarter where rollout of commercial service occurs(60K phonesX$1,000 ea.). These are likely high margin units. What about China? Where are their orders? If G* ordered some 300,000 phones, and the service providers keep repeating the same story about huge demand, why are all 300,000 not presold to the service providers with the lines humming to fill the second round of orders??? Are the service providers timid about the market? Why not step in with guns blazing, phones flying, minutes burning??? I don't get it. How could there possibly be a lack of production of handsets? It does not make sense. Saying that the manufacturers have to see demand before they jump in is crap. They have an order for 300,000 handsets. That is already done. Now build them, and deliver them. This should never be an issue, especially after Iridium has shown us what a critical mistake it is. Would Sprint PCS start service in a city and then say "Oh sorry, you can't sign up because we have no phones"? Obviously, no. So, our fundamental argument, that these savvy service providers are oozing experience in wireless, is faulty. Airtouch would never start wireless service without phones. They would definitely start service with poor coverage, but never without phones. Why should a global wireless service be any different?
