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

To: engineer who wrote (4515)	12/23/1999 3:49:00 PM
From: RocketMan	Read Replies (3) \| Respond to of 13582

The ASICs themselves are not hard to do ... So it appears that Nokia has three choices: (1) Copy and mass produce, pay Q royalties (2) Buy from Q, pay Q the cost (3) Make them, pay Q royalties + continuing R&D costs Seems like (1) is do-able, but hard for them to compete with the Japanese, who have perfected this technique. (2) seems the most cost-effective, but Nokia may not like to be tied to Q as a supplier for the long term. (3) is the most costly, loses them lead time to market, but keeps their R&D current and appeals to their pride as the #1 vendor of cell phones. So my guess is they choose door #3, but in all cases Q wins.

To: engineer who wrote (4515)	12/23/1999 4:11:00 PM
From: quidditch	Respond to of 13582

engineer, gdichaz--re. Japanese the ones turning the spiggot off during the Q-3 CC call component crunch--you are absolutely correct that the shortage was Japan based: during the CC, it was Dr. J who said either Thornley or Sulpizio was participating from Japan, where he was addressing supplier issues, "among other things".... Steve

To: engineer who wrote (4515)	12/24/1999 1:18:00 PM
From: John Biddle	Respond to of 13582

As for Intel and AMD, AMD just copies whatever Intel does. Intel builds about 90% of all mother boards int eh industry, so in effect,they ARE the front line mfg for all PCS and do stay in the market. Their biggest allie here is Compaq for feedback, but yes, if they did not have this they would produce chipsets which did not answer the needs of hte market. Intel/AMD may not have been the best example, more on that later. Since Compaq and IBM don't buy Intel motherboards I believe your 90% figure is a bit high, but I understand your point. I disagree, but understand. And Yes, the ASIC engieners need to get not only marketing level feedback to build the right product, but system enhancement level feedback to build the product, such as wishes for new additions, new methods of integration for things like GSM, WCDMA, etc which they might not get exposure to if they just sold chipsets. I don't disagree with this part at all, such feedback is indeed critical to the parts supplier so that they can manufacturer parts that the customers want and will purchase in the future. Where you and I part thinking is that you believe that in Q's case, this requires keeping the handset engineers (hope I paraphrase correctly). I do not. There are a large number of hugely successful parts companies that do not also participate in the markets into which the items containing their parts are sold. In fiber optics there are JDSU, SDLI and ETEK; In networking you have VTSS and PMCS; even in misc. digital phone parts there's AMCC, RFMD & CNXT. Lucent and Nortel have just both moved away from making their own low end parts in favor of buying them, and both are not only capable of making good parts, but already were (unlike NOK which isn't there yet and may never be). They have decided that the benefits of vertical integration do not outweigh the benefits of buying from specialist manufacturers. This helped JDSU, et. al. significantly, but do you really think that either Nortel or LU would have done so if Uniphase was selling DWDM equipment to compete with them? They would not. The kind of intimate partner relationship that you and I both agree is required cannot occur if one party believes that the other may use its proprietary information to compete with him. Trust is critical, and one does not engender trust while maintaining a large conflict of interest. Q can get away with this kind of behavior only because they are nearly the only game in town and CDMA is still relatively small. If they want to be the only game in town when the market is gigantic, they have to let go of end user products and focus on their customers. Overall, I like the deal with KYO because it focuses on the strengths of the CDMA market rather than the weaknesses on the competition. Football may be a game where winners are determined by the best defense, but business is not! CDMA dominance in Asia will make very clear to everyone in the world the shortcomings of GSM and TDMA.