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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?


To: Gregg Powers who wrote (367)7/29/1999 12:36:00 PM
From: moat  Read Replies (1) | Respond to of 13582
 
Gregg Powers wrote: >>>>>Second, my firm runs $3.2 billion of 'other-peoples-money'. This means that I am a fiduciary and required to prudently manage my client's assets. Qualcomm's rapid appreciation created an arithmetic conundrum for me and my firm. If we never sold a share, we would have held more than $1.2 billion of the stock and QC would have represented over thirty percent of our assets under management. Despite my analytical sentiments on the topic, such would have been an indefensibly large, irresponsible and potentially legally actionable, allocation for a firm that represents itself to clients as value-oriented and diversified. Beyond this, many of my clients impose strict limitations on maximum position size, i.e. no security can exceed 5%, 10% or 15% of total portfolio value etc. In these cases, our sale decision was contractually stipulated. Within the context of the above, we sold the minimum amount of stock that we could as fiduciaries. As Moat correctly pointed out, QC is still PCM's largest position by a very large margin, so our sale decision was NOT linked to a change perceived fundamentals or some change in my sentiments towards the company or its management.
<<<<<

Given your insight of this business and its potentials, I wonder what W.E.B. would have done for his clients?

Perhaps you could set up a separate vehicle to deal with the "problem" (e.g. for those clients who opt not to take capital gains). Imagine back in 1986, and again in 1991, one understood that the right way to think about DOS and Windows was to think in parallels to a language, a language like English (we can't rip Windows out for the same reasons why we can't rip English out). Imagine back in 1990 one understood that that same thought applied to Cisco's routers (Cisco's routers talk to each other using its own proprietary language, hence blocking out all other devices). Imagine one understood that, and then reduced his holdings during the *early* years of those companies' ascendency (rather than *adding* shares).

PCM was QCOM's largest holder, you were *early* due to your *insight* (of its IPR).

If I was a client of PCM and had all this gain (up 8x?), I would much rather you used your *insight* to deal with the stock rather than selling it based some arbitrary rule (imposed by PCM, SEC, certain clients, or whatever).

Businesses like these don't come around in tech land very often right? Is there a more creative way for PCM to deal with this "problem"? (Individuals have such an advantage!)

I hope you did not mind the suggestion (and that's all it is, a suggestion). Thank you for being here on SI.



To: Gregg Powers who wrote (367)7/29/1999 12:50:00 PM
From: Mika Kukkanen  Read Replies (2) | Respond to of 13582
 
Gregg: Agree totally with your comments, well almost:

"Finally, will all due respect, Mika is incorrect about GPRS. Several carriers have specifically told me that GPRS will require both new handsets and infrastructure replacement."

New handsets yes, not infra replacement (addition yes).

"I believe that this is one of the reasons why the GSM carrier community is so rabidly anti-IS-95/cdma2000."

Absolutely...that was what the 'war' was about (the issues raised here were merely ammunition and political manouvering).

"Since IS-95 carriers have a MUCH CHEAPER, MUCH SMOOTHER AND MORE FLEXIBLE upgrade path, they will have a significant competitive advantage as high data rate services take off. The TDMA-based GSM community would very much like to have leveled the playing field, but the Ericsson deal changed the equilibrium."

Agree in principle, as I noted above.

"As for Nokia's pursuit of GPRS/EDGE, well gee whiz Mika, I guess that's all Nokia can do right now considering it doesn't have a CDMA infrastructure license. Do you really expect Nokia to go around telling customers that GPRS is an inferior, more costly, upgrade path that will yield lower data rates that 1XRTT, impose substantial spectrum planning challenges, obsolete existing handsets and then obsolete these newer handsets again when EGDE gets deployed? Not bloody likely. Nokia's credibility is getting stretched pretty thin on this topic in my humble opinion."

Ahh, but the 'new champion' is also telling the same story as Nokia. The GSM evolution systems are never replaced, so to get a new service you buy a new handset (that comes with natural upgrades and new subs). BTW, cdmaOne handsets may handle fast data rates as they evolve, but I bet you will need new handsets to run the applications to make use of these services?

I suppose that is the reason why operators are already ordering GPRS, outside the US it is not a question of 'if' but 'when'.

All the best,
Mika



To: Gregg Powers who wrote (367)7/29/1999 2:48:00 PM
From: JGoren  Read Replies (1) | Respond to of 13582
 
"Qualcomm Inside": Does anyone know the real requirements for stamping "Digital by Qualcomm" on the handsets. I thought we knew the basics, if it has qualcomm chipset, it has to be there. I was in the Sprint store today. I only had time to check one phone, a Samsung (which I thought used Q chipsets). The text was nowhere to be found, even inside the battery housing.



To: Gregg Powers who wrote (367)7/29/1999 5:39:00 PM
From: Maurice Winn  Respond to of 13582
 
*Multimode complexity and cost* Irwin Jacobs who fought long and hard for harmonisation, said during the 3G CDG Web conference in response to a question that the additional costs to produce a multimode device are reasonable, though more than a fully harmonized standard. As qdog has constantly bemoaned, bloatware is the curse of bandwidth. It's also the curse of speed, efficiency, battery life, size, cost and happy customers.

I have long been a proponent of 'complexity' as a defence against competitors. But that complexity should be purposeful. Ericy's VW40 was designed primarily to provide a barrier to entry. To hell with customers. True enough, as you say, Q! is best placed to handle the complexity involved, and this will be advantageous to them relative to competitors. BUT, our aim is to make the most money and have the most happy customers. There is enough complexity already in the pipeline and there is no end in sight to how complex, sophisticated and multifunctional cdma2000 devices can get.

Q! can make more money by keeping the complexity increasing extremely fast, as they have been doing with ASICs for cdmaOne. Some people like the slogan, Keep It Simple Stupid, [KISS]. They should use the slogan Don't let a slogan do your thinking for you. Complexity in car design, brain design and cdma2000 devices is GOOD. Simplicity in operating the cars and cdma2000 devices is GOOD. A thing can be complex and simple to operate.

Brain bandwidth is the scarcity which has arrived on our desktops, not processing power, pipeline bandwidth or memory. George Gilder talks about 'the new scarce resource', well, that's it.

cdma2000 has to save brain bandwidth and do it super efficiently and at low cost. If Qualcomm goofs around with multimode 3G devices, that is contributing ZERO to saving brain bandwidth. It is a simple territorial battle in the same mode as Ericy with their absurd efforts to over years to stymie CDMA. Sure, Q! can win such a battle, but it is a useless battle in the grand scheme of things, though it gives Neanderthals a few more years before their demise. CDMA has been set back by the battle. Let's not be Neanderthals like Ericy and cheer at inefficient multimode.

It's better to have a single 3G standard and go hell for leather on developing the most advanced, complex and simple devices possible at the cheapest price, to make it easy for everyone to buy, which will maximize profits. A multimode standard will slow that process and not give Q! any advantage they don't already have.

Of course if there are REAL technical or functionality reasons to have various modes, that's another matter altogether. My comments are only aimed at difference for the sake of being different, which is a waste of effort and will reduce profits in the long run.

<In addition, I am thrilled by the multi-mode (direct-sequence and multi-carrier) compromise. CDMA IS VERY COMPLICATED and the multi-mode standard creates still further complexity. This complexity benefits an IPR-centric leader like Qualcomm, because its patent portfolio and technology experience give it a tremendous competitive advantage. Look at the trouble Nokia and Motorola have had stabilizing their 'run-of-the-mill' IS-95 chipset. It should thusly be obvious that the greater challenges inherent in a potential multi-mode chipset favor Qualcomm.>

Imagine how Nokia and all will feel when they see Q! racing out the MSM5500, MSM6000 and MSM10000, all blazingly fast and efficient and really cheap.

Come over to the light side!

Mqurice

PS: To elaborate a little further on VW40. There was a guy called Bill Frezza, to drag him out yet again to flog [let's hope Ramsey doesn't read that backwards or I've broken the no golf thread rule]. He was in the pay of Ericy [3 days a month consultancy and had been their director of marketing or some such] and accused Irwin Jacobs of fraud, CDMA as being a scam or at best an absurd dream designed to keep what he called The CDMA Mafia in business. So, we had the CDMA Mafia and GSM Nazis whose stock in trade was propaganda, lies, deception, dissembling, stonewalling and all that stuff that fools people. They denied CDMA would work. They claim to have invented it. They denied they were interested at all in cdmaOne. They bought the cdmaOne production plant and licences to produce it. Anyway, to shorten a very long story, the original Nazis, [notice the zzzs in Frezza, Nazi, Zenit] were proponents of the original VW Volkswagen.

Hence VW40, which worked in nicely with Vapourwear as in the King isn't wearing any clothes.

Isn't it ironic though that the original VW was a mass-produced single-mode, low-cost means of getting millions onto the highway. Now, half a century later, we are debating whether we should have a single mode people's transporter to take them onto the wireless information superhighway. I like the Henry Ford Model. Mass produced high quality single mode production. It can be any colour you like, as long as it's black. Okay, we could go with multi-hued casings and multi-tuned ringing. Multi-language keys. Multi-language voice control = goodbye keyboard. Stuff like that. But let's not have weirdo chip rates, synch, concatenations and orthogonality.



To: Gregg Powers who wrote (367)7/30/1999 7:18:00 AM
From: limtex  Read Replies (1) | Respond to of 13582
 
Gregg -

I went into Sprint on Madison Ave yesterday at about lunchtime to buy a new Qualcomm phone. I had difficulty getting into the store and when I got in you had to pull a slip out of one of those gadgets that gives you a number to wait on line and then they call the numbers etc.

Anyway my number was so far away that I decided to come back later in a quieter period in the afternoon. I got back there about 3.30 and the situation was even worse. The place was packed an I gave up and left. I'll try again first thing this morning.

Now where else do American consumers hang around waiting on long lines to buy retail products. I have seen this sort of thing in Russia a few years ago, in Scandanavian airports maybe even in US airports but iarports don't count becuase there is much more limited choice.

I tell you the Sprint store was heaving with people, unbelievable!!!

Best regards and as always thanks Gregg,

L