Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Gregg Powers who wrote (1077)	8/24/1999 8:27:00 PM
From: llwk7051@aol.com	Respond to of 13582

Gregg, My problem is I find it hard to correlate infrastucture growth going to areas other than CDMA with the fact that CDMA is expanding faster with users than other technologies in percentage terms. The Merrill Lynch report was only comparing announced contracts. Is CDMA so much more efficient that it does not require the same build out costs? (In other words, once a geographic area is covered more equipment is needed for other technologies to cover the same number of users.) Should infrastructure expenditures be a lead indicator for future growth? If not, why not? I would have expected greater CDMA expenditures as operators in US and Japan expanded to new markets. I am having a hard time understanding how CDMA is winning the war if other technologies are having higher growth rates for infrastructure. Maybe the 18 month period and front end build out in the US distort the numbers, but it concerns me about future trends. Your comments would be appreciated, Robert D.

To: Gregg Powers who wrote (1077)	8/24/1999 10:36:00 PM
From: engineer	Read Replies (1) \| Respond to of 13582

It is also relevant to notice that due to coverage issues, TDMA and GSM need 4-6 times as MUCH infra as CDMA, so even if they have more sales, they are probably not selling as much coverage...

To: Gregg Powers who wrote (1077)	8/27/1999 9:11:00 PM
From: Caxton Rhodes	Read Replies (3) \| Respond to of 13582

Greg and all- This was posted on the Gorilla Game email goroup and I would like some help responding. How about it? Thanks to all in advance. Caxton Ron brings up an interesting point. On a similar note I have been in contact with several of the companies that are part of the standards body (Lucent, Ericcson, Nokia and Qualcomm). This is what I have found out. 1) When W-CDMA is made the 3G standard and rolled out it becomes free. Yes, free. That's what a standard is, a policy set by the government to ensure that all competitors have equal footing. 2) The only proprietary or licensable products become the individual parts of the network (Chips, handsets, base stations). These products can be made and sold by anyone without a licensing fee. An example of this is ATM which is a data networking standard. Both Cisco and Lucent make switches that work on ATM without paying anyone a licensing or royalty fee. If you don't believe me than answer this, who gets the licensing fees from GSM? 3) What will happen is that companies will partner with each other to provide end to end solutions. For example a manufacturer of base stations would partner with a manufacturer of handsets. So if Qualcomm can manufacturer or produce the parts necessary for a part of the value chain they can benefit from that aspect but not the licensing fees. 4) As part of the recent settlement Ericcson does not have to pay royalties to Qualcomm on current infrastructure sales. Infrastructure is much more profitable than handsets. 5) Lucent was one of the first to do work in the CDMA field, has numerous patents and produces chips for the handsets, for that matter so does Nokia and Ericcson who are both building their own CDMA phones. While qualcomm currently (before CDMA is made a standard) can force a small vendor to pay them a fee the large companies have patents to trade. Qualcomm and others must cross license these patents so it becomes a push. 6) A point to remember in technology, the best technology rarely wins if it did we would all have Apple computers, run on IBM chips connecting to networks based on Cabletron switches. Installed base and customer reach are more important. Few clients ever want to change, even to a better technology, after its been installed. If you don't believe that than why is the US still not metric? 7) In terms of the market reaction I can't explain why some stocks are bid up in the short term but if the market is always right why is Network Associates at 16 not its high of 68, NEON at 16 not at 78, AMD at 19 not 35? The examples are endless the market over reacts and is based to some degree to investor sentiment.