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: John Biddle who wrote (4554)	12/24/1999 4:06:00 PM
From: moat	Read Replies (1) \| Respond to of 13582

John, Thank you for your very thoughtful posts. IMO a central issue is for Q to obtain GSM IP rights economically, so it could produce dual mode ASICs for dual mode 3G phones (GSM+cdma2000/WCDMA). The engineering part is not a major issue in my opinion. Both GSM and CDMA have been working for a long time now so people will be able to engineer it (Q has the edge in CDMA know-how though). IMO, Q obtaining GSM IP licenses, and how it does it, is the key to this story at this moment in time. Irwin has stated many times he is working hard on it. This obviously is vital to Qualcomm's ASIC business because going forward Qualcomm would very much like to produce and sell dual mode (GSM/CDMA) chips. As to the Kyocera deal, I believe Nokia would have been Q's first choice provided both Q and Nokia got the deal they each wanted. They just couldn't come together at this moment in time (Q wanted to sell ASICs and obtain a good GSM IPR deal, Nokia is still very GSM-centric, probably wanted a break on royalties from Q, etc, ... pure speculation on my part). Nokia would have been the much better partner for Q if Nokia embraced CDMA. That is, to start integrating, and pushing, CDMA into the vast GSM footprint (GSM is over 5x the size of CDMA today, and these infrastructures are very long duration businesses) ... but why should Nokia? This was not to be (probably) because Nokia wanted to (must) protect its 'hold' on its GSM business as much as possible, and it was not in their interest to embrace cdma2000 the way Qualcomm wants the world to. Everyone has to act in their own best interest. Nokia, rightly so, is not interested in seeing Qualcomm make dual mode (GSM/CDMA) chips just so that Q's Asian and American customers could produce and sell 3G handsets into Europe. The Europeans (Ericsson, Nokia, etc) have so far successfully locked out the rest of the world (into GSM Europe), and they would like to keep it that way (by using GSM IPR as a barrier). If (when) CDMA conquers Europe (via cdma2000 or WCDMA), China would be an automatic convert. The way things look, perhaps China will start on CDMA before Europe. Either way is fine really. Charlie Munger have said that a sign of a good business is that management is constantly confronted with 'good or better' choices to make. This characteristic was demonstrated this week. Qualcomm's CDMA is on a roll, the Kyocera deal is a good one as Ramsey's shy friend explained, however just not the best one possible IMO. So, Nokia is still an inflection point Qualcomm shareholders could look forward to in the new millennium (herhaps in 2000 or 2001). Lastly, I want to take this opportunity to thank everyone on this forum. I have learned a great deal about this business and its technology here as well as from the old Qualcomm thread (plus bags and bags of $ under the tree of course). Happy Holidays Everyone! moat