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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: The Verve who wrote (74188)	6/18/2000 11:32:00 AM
From: John Rieman	Read Replies (1) \| Respond to of 152472

3G subs goes from 0 to 300 million, in the next 5 years..... wirelesstoday.com The evolution of wireless systems from the second to the third generation will not have a singular, simple solution, according to a new report from Cahners In-Stat Group of Scottsdale, Ariz. The report, On the Road to 3G: A Migration Roadmap, claims 3G wireless service will be mandatory to preserve the greatest feature of the worldwide GSM network, the subscriber?s ability to seamlessly roam from country to country. However, while 3G/UMTS offers a convergence roadmap, both migrating and new operators will face implementation obstacles. "What the reports talks about is that there are multiple paths available to 3G," says Ray Jodoin, group manager and principal analyst for wireless technology at Cahners In-Stat Group. "There are three primary cores to the technology ? all have a wideband CDMA component on top. But underneath, the technology features CDMA, TDMA or GSM. The choice of these technologies will be geographic. "The actual deployment of 3G will not occur homogeneously," Jodoin says. "Implementation timetables will vary by geographic region. Whether or not the service provider is a 1G/2G incumbent, and whether UMTS frequencies are used, will significantly influence strategy decisions. Deployment schemes must be weighed relative to the economic and technology issues. Even new service providers who start off with 3G infrastructure face difficult cost decisions regarding site and tower acquisition, as well as potentially huge auction fees." 3G wireless infrastructure promises to bring subscribers a bandwidth of 384 Kbps, and offers the possibility of video streaming, audio streaming and Internet access using wireless equipment. Cahners? analysts expect 3G to develop first in Japan, probably in early 2001. The analysts say 3G will next develop in Western Europe in mid- to late-2003. Cahners estimates that forklift upgrades of an existing GSM network for 3G could reach 145 percent of the original infrastructure investment. However, Jodoin says caution should be used when predicting the cost of 3G upgrades or first-time installations. "No one is saying what 3G will cost because they don?t know," Jodoin says. "We take are taking an average of what the equipment manufacturers are saying to develop our estimates. For example, in the United Kingdom, there are four existing service providers, two in the 900 MHz band and two in the 1800 MHz band. Seventeen companies are bidding on five licenses in the United Kingdom. So far, Vodafone [VOD] has the highest bid, but it is hard to predict how the final bids will turn out." Jodoin says the market for 3G in the United States is particularly interesting. Right now, it remains unclear whether the FCC will allow U.S. service providers to buy all of the frequencies for 3G. Consequently, it appears some carriers will use existing frequencies and upgrade them to offer as many 3G-like features as possible.

To: The Verve who wrote (74188)	6/18/2000 11:38:00 AM
From: arun gera	Read Replies (1) \| Respond to of 152472

>>What is it about Piecyk's analysis that bothers you so much? You don't feel comfortable with his 2 assumptions that in 10 years 85% of all cell phones and connected appliances will be CDMA based? Or is 2 billion appliances too aggressive for you?>> Verve: It is quite clear that Piecyk just tried to end up with a nice round number of $1000 (or $250 today). My main objection is that it is impossible for anybody to predict what is going to happen in 10 years. I would trust an analysis that targets the projections for the next three years. Arun

To: The Verve who wrote (74188)	6/19/2000 1:02:00 AM
From: Mark Marcellus	Read Replies (1) \| Respond to of 152472

You don't feel comfortable with his 2 assumptions that in 10 years 85% of all cell phones and connected appliances will be CDMA based? Or is 2 billion appliances too aggressive for you? Or do you feel he wasn't correct in assuming that Q will receive royalties on those 2 billion appliances? "Correct" doesn't enter into it. Those are all definite possibilities, but I don't see anything you can hang a 10 year revenue projection and a $1000 price target on. There is no way anyone can predict Qualcomm's business to anything close to a degree of certainty that enables you to do that. There are too many variables, especially since this is still an emerging technology. Maybe something better than CDMA comes along. Maybe other companies find a way to engineer around Qualcomm's patents. Maybe Qualcomm is forced to negotiate much lower royalties for their patent portfolio. Maybe the other businesses Qualcomm engages in come up losers and erode away any value they derive from their CDMA business. And so on. Sure there are plenty of positive outcomes one could counter with, but the fact remains that the future is very uncertain. I find it ironic that no one blinks an eye when Piecyk projects 25 billion in royalties (sure it's possible, but let's see some signed agreements first), but everyone has a hissy fit when Snyder projects that Globalstar will go bankrupt. Wake up folks, he may have imputed much more certainty to his prediction than was warranted (sound familiar?) but a G* bankruptcy is a definite possibility. Peicyk's analysis didn't factor in Q's cash flow from their ASIC division (assuming they don't jettison the division for some odd reason) It was based on royalties only. True. Let's say he assumed that the ASIC division would break even. Based on what we've seen from infrastructure and handsets, that doesn't sound like an outrageous assumption. And I do hope that 10 years from now Qualcomm is doing more than just trying to rake in money from their patents. If that's all they can do, they are nothing more than an IDC with a slightly better patent portfolio. If I thought the only thing in Qualcomm's future were royalties, I'd sell my stock right now, even if I knew that Piecyk's $25 billion was in the bank. Strange as it may seem, I'm fairly optimistic about Qualcomm's future. But compared to what I'm responding to here, I can't help but sound like Dr. Doom. So, much to everyone's relief, these will be my last words on the subject because there isn't much more to say. Anyone who chooses to believe that Piecyk is a sound analyst who produced a sober, disinterested analysis either doesn't need my help, or is beyond it.