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

To: tero kuittinen who wrote (19879)	3/12/2000 11:15:00 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

Thanks for the summary of your expectations for gsm's outlook and migration path, Tero, and for the effort you made to put it into a Gorilla gaming framework. Your point about switching costs being unusually strong in this sector is well made, particularly if one reflects on the large number of carriers still employing analog technology. >> The real problem is this: I can't answer 14 posts without being accused of intruding the thread. And now when I leave I'm guilty of evasion. I don't think anyone will accuse you of evasion, Tero, and you can be confident that you've left the Gorilla hunters with some points to ponder. Since we're not a stock specific thread, further detailed discussion is probably best left for the NOK and Q threads. I trust you won't mind if some of us visit your home thread to continue the debate. Thanks for stopping by and for the courteous manner in which you presented your case. uf

To: tero kuittinen who wrote (19879)	3/12/2000 11:43:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Thread, I'd like to respond to Tero's cogent post #19882. I'm responding to the thread because Tero wrote that he doesn't want to post again here. My thanks goes to him for couching the important issues in his post in context of Gorilla Gaming. When he mentions that Nokia hasn't been discussed in that context, I believe him to be very wrong about that. I believe it was discussed long ago many times. Most people concluded that for most markets it is in, Nokia is playing a royalty game. Even so, if there are some Gorilla Games being played by Nokia as Tero adroitly suggests, Nokia is not nearly as pure an investment play in Gorilla Gaming as I would want my investments to be. As he acknowledged, even in his opinion Nokia doesn't have the characteristics of Softie, Cisco or Intel. I believe Qualcomm does and that is why my investment dollars are in Qualcomm, not Nokia. Tero wrote: I can't answer 14 posts without being accused of intruding the thread. And now when I leave I'm guilty of evasion. It's a perfect trap. That perspective borders on paranoia in my opinion. Lots of people have written many more than 14 dissenting posts around here, each of them welcomed. The case in point is that I and others embracce Tero's post #19882 because it presents an opinion and the basis for it, all in context of Gorilla Gaming. With more posts like that I would encourage him to change his mind and continue posting here. Moreover - I can't really go as far into mud as people who use pseudonyms can, since I'm writing under my own name. So the slur contest is one I'm going to lose every time. It may be just my perspective but I haven't seen any slur contests going on. And I have never, ever written a post in any forum in cyberspace without using my real name at the end and the closest thing I can get to it in my screen name. Even so, I am not the slightest bit concerned about the use of screen names by others that don't divulge real names. 'Nuff said. --Mike Buckley

To: tero kuittinen who wrote (19879)	3/12/2000 11:58:00 AM
From: Peter Sherman	Respond to of 54805

FWIW - I hope Tero stays - to quote Voltaire - not this one, that one - "I may not agree with what you say, but would defend with my life your right to say it" -

To: tero kuittinen who wrote (19879)	3/12/2000 12:25:00 PM
From: freeus	Respond to of 54805

Hi Tero, I agree with you on Nokia: have had a little for two months and have five wonderful '02 leaps, will grin broadly when they become 20 wonderful '02. Nokia is growing earnings by leaps and bounds. Freeus

To: tero kuittinen who wrote (19879)	3/12/2000 2:01:00 PM
From: Martin Atogho	Respond to of 54805

Tero, >> It's this traditional reluctance of mobile operators of switch vendors that makes the Japan Telecom W-CDMA order with Nokia important. It's one of the few recent cases of a a vendor breaking into a new, major market. What compelled JT to bypass Lucent, Motorola and many Japanese companies to place the order with Nokia? The most likely answer is that Nokia's role in creating the original W-CDMA proposal gave it enough credibility to swing the deal. <<< WCDMA deals are already being made. Is there no way of telling how the IPR issues are going to be dealt with thus far? Like you said at the end of your interesting post, there are a lot of royalty claims. Surely this issue must already have been dealt with by JT and Nok? What am I/we missing that should clarify this IPR issue? TIA, MA.

To: tero kuittinen who wrote (19879)	3/12/2000 11:19:00 PM
From: Eric L	Respond to of 54805

Tero, << the last post I write to avoid further anxiety attacks >> Please do not have an anxiety attack because of any of us here (and we all know you well enough to know you are not too prone to same). I personally appreciate your poking your head in the door and posting on the "G & K Portfolio Candidates" (G&K) thread. You are a long time valued poster on SI and I (and several other of my long time SI friends, many of whom contribute to this thread) consider you to be one of the several (but all too few) real experts on wireless mobile telephony that posts here. As for your comment that "the definition of a telecom gorilla on this thread is formulated from a US point of view" I will repeat the fact that our definitions of primates and royalty are postulated by the writings of Geoffry Moore, Paul Johnson, and Tom Kippola. I guess you could say that that is a "US point of view", and in fact a Silicon Valley point of view. Regardless, we ask all posters here to use their terminology when discussing Gorillas, Kings, and Princes here. We are all pleased that you have read the "Gorilla Game". Perhaps you read the first edition (FM) and if so you might want to read the revised edition (RFM). As a Ph.D. candidate in neurobiology turned Wall Street analyst it can't hurt. <g> You might also want to read our excellent thread FAQ: Message 13187202 Hopefully after a reread of the Gorilla Game and Fred's FAQ you will come back and post. You might even want to backtrack the thread and see how we came to the conclusion that Qualcomm is a Gorilla (in CDMA space). I would like to question one statement you have made here and that is "W-CDMA will be the dominant 3G standard". My first question is: Who maintains the W-CDMA standard? My second question is: Is there a W-CDMA standard? GPRS is a standard (ETSI for GSM). EDGE will be a standard ((ETSI for GSM). W-CDMA is NOT a standard and will not be a standard. Is it possible that you are referring to the Universal Mobile Telephone System (UMTS) which incorporates an air interface called UMTS Terrestrial Radio Access (UTRA). The Nokia web site says that UTRA is often applied with identical meaning of WCDMA-DS. I maintain that now that Release 99 has been published that W-CDMA is an obsolete term (except as it applies to a non standard implementation of a GSM network with a CDMA air interface, and in any event it is NOT a standard. ETSI, 3GIG, & 3GPP have never used the term in any documents they have published since they elected to use a CDMA air interface for 3rd generation GSM in early 1997 and published their initial drafts. Your points (here and elsewhere) about licensing and cross licensing of CDMA (all types) IPR are well taken as it applies to 3G. This is indeed, a matter that is not yet decided, but yes, those of us who are invested in QCOM, do have some faith and that faith goes beyond emotion, and rests in some reasonable DD on the subject. As always, I enjoy your posts and hope you will come back and post here. All of us hope that you will accept our common vocabulary (which we did not invent). BTW: My good friend Cha2 (chaz on Nokia thread) and I, are still waiting for the second darned installment of "Global roaming - the Buck Rogers Bust" that you started on DeBry.com last July. Maybe you could give us a special update here. - Eric -

To: tero kuittinen who wrote (19879)	3/13/2000 4:57:00 PM
From: Mr.Fun	Read Replies (5) \| Respond to of 54805

Greetings G&K thread denizens. Having witnessed Tero's long-standing abuse on the Nokia thread by the monomaniacal QCOM crowd, I can understand his over-sensitivity (some might say paranoia) here. In any case, while I have some major quibbles with the manual, I would posit that Nokia fits the bill better than some other favorites. Some observations: 1. The market where Nokia is a gorilla is not wireless infrastructure, where the landscape is marked by technologically distinct kingdoms, but in handsets. 2. However, Nokia's status as Gorilla is not on the basis of transmission technology (CDMAOne vs. GSM vs. IS-136 TDMA, etc.) rather it is on process technology and user software. Nokia's handset dominance cuts across transmission technology, precisely because those standardized technologies offer no real opportunity to differentiate. 3. Rather, Nokia's differentiation (and BTE) is based on several interlocking and powerful market mechanisms that reward the strong and punish the weak. 4. First, Nokia has an internal design process that lets them deliver a wider array of new products more quickly than any of its competitors. Included in this overarching process strength are key technical strengths in industrial design, miniturization, power control/battery design, user interface software, display technology, etc. that are essentially impossible for competitors to match. 5. The net result is not only superior products, but also extraordinary customer loyalty. Nokia loyalty tests off the scale, THE key in a market where buying cycles are becoming shorter and shorter. It also means Nokia earns a price premium. 6. Furthermore, because of the alphabet soup of wireless standards, it is difficult to stay competitive as a single technology specialist. Nokia leverages its product designs across multiple frequency and technology platforms. Nokia can change its manufacturing lines to turn out different forms of its phones in minutes - everyone else takes hours. This is a product of design excellence, experience and manufacturing sophistication. 7. This is also why it is very likely that Nokia will gain the leadership position in CDMA handsets (where it was clearly late to identify the market) whether or not it decides to buy QCOM chipsets. It has better designed phones, customer loyalty, and lower costs. This is not unlike Cisco's late entry into Layer3 switching 18 months late - many thought Extreme, Foundry and Alteon would be able to hold them off. NOT. 8. Finally, Nokia enjoys enormous economies of scale. Not only can it command better prices from its suppliers, but it also gets assured supply in a market rife with component shortages. 9. I believe Nokia's advantages in the hot wireless device market add up to the low risk/high return opportunity that is at the heart of Gorilla designation. It is evident in Nokia's handset operating margins, which at nearly 25% are 4 times higher than any other competitor (5 times if you don't count Motorola). For the reasons outlined above, I believe these returns are sustainable. 10. In contrast, (and in the spirit of controversy) I would question JDSU's inclusion as a king. It is enjoying a market of extraordinary demand. It can sell everything it makes. It can charge almost as much as it wants. It is growing at an astounding pace and earning extremely high margins. However, for almost every part JDSU makes for almost every customer, there is a second or even third source. In fact, its two largest customers LU and NT are two of its best competitors. EVERY supplier in the market is adding capacity at a breakneck pace (NT and LU are more than tripling capacity). Eventually, capacity WILL catch up to demand - then, where is the differentiation? what will happen to prices and margins? JDSU is a great investment, a leading player in perhaps the hottest part of the high tech landscape. But I posit that it is in fact a king, not a gorilla.