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To: KevRupert who wrote (114)	6/27/2000 7:19:00 AM
From: KevRupert	Respond to of 186

QCOM/MOORE Part 2: To: Mike Buckley who wrote (26859) From: Bruce Brown Tuesday, Jun 27, 2000 2:34 AM ET Respond to Post # 26871 of 26874 RE: Rambus & Qualcomm Since I'm a member of that GG list, I figured why not take the whole post in its original form? BB ---------------------------------------------------------------------- Subject: Qualcomm and Rambus From: "Geoffrey Moore" Date: Mon, 26 Jun 2000 08:49:52 -0700 Gang, I am about to go off on vacation, but wanted to wiegh in on something that may already have been duly noted, namely the parallels between market reaction and adoption of Qualcomm and Rambus. In both cases the companies showed up with blocking patents in key technologies. In both cases the industry required to license these patents has done everything it possibly could to wriggle off the hook. In neither case do they appear to have succeeded. I just saw a squib yesterday that Intel shut down its "bridge" chip operation, after losing $250M on it--this was to be a substitute technology for Rambus. Now RDRAM is the only supported solution in the architecture plan, I believe. This would appear to solidify their gorilla anchor. The higher level question for the market is how to value a gorilla once you have priced into their stock the impact of winning their first market. This is the issue of "gorilla adjacency power," the ability of a gorilla to muscle its way into adjacent markets, a la Microsoft and the browser and LAN markets. We know there are plenty of other markets besides the PC where fast memory will be valued. The question is, have the value chains in these other markets consolidated around other standards yet? If so, can they be broken back open (normally requires a 10X advantage). If not, can they be co-opted by Rambus (realizing that once a gorilla is identified, everyone is an emerging value chain tries desperately to keep them out). Same issues apply to Qualcomm. Cheers, Geoff Geoffrey Moore Chairman, The Chasm Group 411 Borel Avenue, Suite 550 San Mateo, CA 94402 Venture Partner, Mohr Davidow Ventures 2775 Sand Hill Road, Suite 240 Menlo Park, CA 94025