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

To: Gus who wrote (5396)	6/9/2000 7:55:00 PM
From: Ruffian	Respond to of 34857

Hey Lock-UP, its dinner time, what flavor you want? Lunch was grape, how about.....lol!

To: Gus who wrote (5396)	6/10/2000 3:20:00 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 34857

Gus, I'm a registered Q! fanatic. You asked about: <A CDMAOne network is 2-3x more expensive than a comparable TDMA/GSM network, with TDMA/GSM costs going down faster than CDMAOne costs. 2) A CDMAOne handset is more expensive than a comparable TDMA/GSM handset, with TDMA/GSM handset costs going down faster than CDMAOne handset costs.> I've explained this before [I think perhaps even to you]. Let's start at first principles. People sell things for what the market will bear. There are market-clearing prices for things. There are optimum prices to maximize long-run profit. There is competition. So, if CDMA does a much better job than GSM, offering high capacity to a service provider, with excellent voice quality and subscriber benefits, it will be more expensive unless competition erodes the price. Since competition is limited in a rapidly expanding market, prices and profits are high. This is a bit like Nokia getting high prices and high margins for their handsets while others scramble for a buck in the low end. Since CDMA offers [in the old IS95 configurations] about three times the capacity of GSM and other TDMA networks, it's not really surprising that the systems are three times the price. As I say, it's contingent on competition not being too serious yet. A CDMA handset might be more expensive than a GSM/TDMA handset but as Nokia finds, that's a GOOD thing. Of course, the margins are important too. The total cost of a minute to the subscriber [including the handset] is what counts to them and the margins which the service provider collects is what counts to them. The rate of growth of a system, actual sales, is the best guide to success rather than the theory. Notice CDMA growth rate compared with GSM growth rate? I know you are numerate, so we are talking % growth here, not handset additions per year. GSM has done really well, but in 2002, CDMA handset sales per month will finally exceed GSM [in 1996 I thought it would be this year so GSM has held on well] Incidentally, you are wrong on the component shortage hurting the niche standard. What is hurt is the low margin standard. Analogue must be in big trouble. Next in trouble would be TDMA and PHS. After that, low margin GSM handset makers such as Ericsson and Motorola. Then the low margin CDMA handset makers. Then the high margin Nokia handsets [but they won't actually have a problem because by the time those others are trampled, Nokia will have all they want]. Top of the heap are the high margin CDMA handsets because they use the minutes on the most efficient networks. They'll be the last to be hurt. Of course, management would have had to form sensible contracts with suppliers so bad management could see even high value handset makers come a gutser in a parts crunch! Don't worry about Q! and GSM IPRs - the GSM Guild has said that patents should be available for modest engineering fees which cover the cost of technical development so don't you think they'd be true to their word and sell Q! the GSM technology for say, oh, 0.1% royalty? You don't think they'd go back on their word do you? Fanatically, Maurice

To: Gus who wrote (5396)	6/14/2000 1:08:00 PM
From: Caxton Rhodes	Read Replies (1) \| Respond to of 34857

Well Gus I too qualify as a Qualcomm fananctic. In answer to your questions: 1) A CDMAOne network is 2-3x more expensive than a comparable TDMA/GSM network, with TDMA/GSM costs going down faster than CDMAOne costs. CDMA 1X will have a minimum of 6 times the capacity of a TDMA/GSM network. Seems to me that makes CDMAOne significantly cheaper than TDMA/GSM. 1X will have 15 times the data rates of current GSM systems. If and when Edge and GPRS work, don't look for them to go above 50 kbs anytime within the next two years. Also don't forget that as GPRS and Edge are installed, GSM capactiy decreases. Q's 1X, which provides 150 kbs initially, which is six times current GSM. CDMA 1X is cheaper and significantly better. 2) A CDMAOne handset is more expensive than a comparable TDMA/GSM handset, with TDMA/GSM handset costs going down faster than CDMAOne handset costs. And the new cdma handsets (with even more capabilities) will be able to sell for even more. The rest of your assertions are meaningless. One more thing, as GSM carriers examine spectrum and WCDMA upgrade costs, comparing them to the ugrade costs for existing CDMA networks, greenfield type application sceneerios are no-brainers for Q's CDMA. As for existing GSM networks, air interface overlays plus HDR may very well offer them a significantly cheaper alternative. The rubber hits the road in the next 18 months when 1X systems go in place. We will see who is hyping and who is not. Caxton