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 : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (4324)	4/21/2000 7:20:00 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 34857

<I noticed that you skillfully avoided addressing the fact that a CDMAOne network is 2-3x more expensive than a GSM or TDMA network while a CDMAOne handset is at least 50% more expensive than a TDMA or GSM handset. > Regretfully, I don't have the time for a long rant, for which I apologize, but you make one of the most important points there, which most tend to forget. First principle of marketing and pricing = sell for what the market will bear. That means, if you have invented something amazing, which can do the work of 10 men at the cost of one, you don't charge one man's price. You charge the price of 5 men. That way, you get all the sales, the customer gets a huge benefit and you make 5 times the money. As you and nearly everyone now knows, CDMA is so much more efficient than GSM that only a third, or quarter as much is needed. That is a very important cost-saving as anyone trying to buy spectrum in Britain will now have figured out. Japanese spectrum buyers will also get wind of the idea shortly. Coverage is also much improved over GSM. So the cost of providing a minute of high-quality calling is wayyyy lower than providing a GSM minute. So, those selling CDMA infrastructure charge the service provider just a bit less than what GSM infrastructure suppliers charge, while keeping an eye on their CDMA competitors, who are also flat out expanding production, so don't need to cut CDMA prices to compete with other CDMA suppliers just yet. They will have to compete soon enough though and I'm sure already are competing [as Ericsson found to their dismay in New Zealand, losing the CDMA order from Telecom New Zealand to Lucent, despite being the incumbent supplier]. Despite those extorquerationate prices charged by CDMA suppliers, the telecom companies are still happy to buy, because it's the best available option. As competition builds for CDMA orders, prices will drop and drop a longgggg way. As the civil engineering costs dwindle, as smaller picocell options are adopted [due to the cost of electronics reducing relative to total cost of the service], the costs will go down even more. What is really going to hurry things up will be the onset of WWeb. HDR is going to be by far the best way of providing the service at a low price. Service providers will not be able to wait around for VW40, W-CDMA, DS-CDMA, and GPRS will be a spectrum-restricted high-cost, slow and soon abandoned method. The fun has begun and it is a LOT of fun. Are CDMA handsets really that much more expensive? I suppose the same thing applies. The ASICs are priced by QUALCOMM to nab as much of the CDMA benefit as is reasonable and accepted by the markets. As competition builds and prices come down, the difference will shrink. Check out the growth rate of CDMA to ensure that it isn't just an over-priced loser, struggling to survive. Sometimes high prices are just the inability to compete. That is obviously not the case here! Anyway, as I say, I really am short of time, so the rant is super-brief. My point about the USA support is to enforce trade agreements and patents. I was not kidding. Maurice

To: Gus who wrote (4324)	4/22/2000 7:47:00 PM
From: Clarksterh	Read Replies (1) \| Respond to of 34857

Gus - I noticed that you skillfully avoided addressing the fact that a CDMAOne network is 2-3x more expensive than a GSM or TDMA network while a CDMAOne handset is at least 50% more expensive than a TDMA or GSM handset. And I noticed that you skillfully avoided that no one cares how much a basestation and handset costs. The operators only care about total cost to support X users, and in that regard CDMA is clearly the winner, and becoming ever more so with the move to 1X (hey, how much is it costing all those GSM providers to move to EDGE or DS-CDMA?). Sorry about the intrusion, but I hate seeing the wrong question being asked. Clark