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

To: Jean M. Gauthier who wrote (8764)	10/24/1999 9:47:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Jean, I always look forward to your posts showing the big picture, such as your take on Dell awhile back that was very forward-thinking. In that context ... pls enlighten me people, I am getting a bit tired of rah-rah on the Q , it seems people have lost their idea of risk and objectivity ? Fair 'nuff. :) I'll respond to your points. 2- the CDMA gorilla, That pretty much says it all. If you don't agree with me that the potential of the market justifies an investment in Qualcomm, we can agree to disagree. But you are apparently aggreeing with me that it is the gorilla of the CDMA market. As a result, you're also agreeing with me that it is the gorilla of an enabling technology used by consumers. Few companies provide investors that opportunity. yes but other "licensees" will be able to produce CDMA semiconductors, under license. The Q seems vulnerable here. I disagree that the situation is vulnerable. If the Q is making money, I'm not concerned. The growth can be huge. Add to that the historic evidence that it's not just a matter of licensing the rights to produce. It has been proven that it is very, very difficult to get things right, which causes semis to purchase the details about how to get it right. That's partly why QCOM is happy to sell the hand-set divisioh. Otherwise, they'd keep it in-house. 3- GSM & TDMA still exist people, and it's GSM that's more prevalent. From what I understand, CDMA is the best technical standard, but a lot of companies will do ANYTHING to not have to pay the Q ANYTHING in royalties. That last part sounds a lot like the Microsoft and Gemstar models, so I'll take that as acknowledgement of good judgement. :) Seriously, when I see the enormous growth in CDMA subscribers, the infrastructure and handset manufacturers that hate the idea of paying royalties to Qualcomm will some day hate the idea worse of not satisfying their own customers' needs. That's the nature of any market. In the relatively early stages of product adoption, there are always notable companies that absolutely hate the idea of succombing to the owner of standard, but eventually they find out that it's not a bad deal to make money by partnering with the owner. If you really don't think that this market will be the same as others in that regard, you shouldn't invest in Qualcomm. Can anybody see this, that Q is an enormously speculative mo-mo investment, At any specific point in time, there's no question in my mind that this will be true. Sadly, it will hapeen at many specific points in time over the long term. The mo-mo players will take the stock wildly up and down. I think they're taking it up now. I think they're taking it up for the wrong reasons when there are plenty of fundamental reasons for it to rise "on it's own." In that context I agree with you that the mo-mo players are a big part of the picture at this point in time but I disagree that it is an "enormously speculative." If you agree with me about the tremendous growth in CDMA subscribers, my long-term threshold eliminates the speculative potential and keeps it strictly in the realm of fundamental investing. that could nEVER become a "wireless" gorilla, but a strong niche player. I don't pretend to have enough understanding of high-tech stuff to know whether or not QCOM could ever become a wireless gorilla. But if they "only" remian a strong niche player, remember that that the second best investment is the chimp of a niche market, second only to a gorilla. That's not a bad downside option. What I really don't understand is why you refer to the "rah rah." You've laid out your concerns and I respect them. I'm confident that all of us respect the manner in which you've done that. But I have to mention that the exhaustive work many of us have brought to the folder really doesn't fit in the realm of "rah rah," at least not to my way of thinking. More important, if the interest in QCOM isn't appealing to you, don't be bothered by others' interest that you might disagree with. You might be right. I hope not, but time will tell. :) --Mike Buckley

To: Jean M. Gauthier who wrote (8764)	10/25/1999 12:15:00 AM
From: LindyBill	Respond to of 54805

. Jean, I read Mike's reply to your post, and I think he covered the points you raised very well. You may disagree with his answers, but they do explain why many of us feel that Q is going to be a "once in a lifetime" opportunity. One further point. GSM and TDMA still do exist, are the biggest now, and remain strong though out G1 and G2. However, every description of the G3 implementation that I have read, admits that CDMA will dominate it. And G3 implementation is about 3 years out, IMO. This means that Q will be an extremely profitable company for the next few years, and that it will be immensely profitable 3 to 10 years out. There is really no way to engineer around the CDMA innovation. It is a major breakthrough in Physics.