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

To: mauser96 who wrote (27792)	7/13/2000 10:32:49 AM
From: Jacob Snyder	Read Replies (3) \| Respond to of 54805

QCOM and control of IP: The Good Book says: the core of a gorilla's power is its control over the proprietary architecture. They can tweak the standards to keep rivals off balance. The supply chain adjusts continuously to what the gorilla wants. But, it seems to me that the opposite is happening. I think QCOM will make a lot of money, even if WCDMA is adopted and CDMA2000 is stranded. But, watching events unfold, I'm wondering if QCOM is failing at displaying a core attribute of gorillas. If QCOM were a gorilla (or becoming one), then they should have been able to impose CDMA2000 as the 3G standard. Instead, it looks like a rival coalition is forcing QCOM to adjust. And, having succeeded at doing it once, what will prevent that coalition from doing it again and again in the future, keeping QCOM continuously off balance, continuously reacting rather than controlling? What is happening is akin to a Compaq/Dell/Sun/Oracle/SAP coalition getting together, coming up with a rival (slightly different) version of Windows 2000, and having the Japanese, European , and Chinese governments mandate that version as the only one used in their territory. Then they say to Microsoft, "now let's negotiate how much of the profits from Windows 2000 each of us gets." Also, I'm wondering whether nationalism is going to thwart the move to a global 3G standard. From an economic point of view, it is inefficient to be developing several different CDMA variants, and then have to develop multi-mode phones to achieve global roaming. But, from the perspective of an EU beaurocrat, or a Chinese Communist, the overriding priority may be winning the local turf war. The Chinese see the history of the 21st Century as Cold War II, between China and the USA. They are intensely nationalistic, and suspicious of foreigners, especially the "hegemonic power", as the USA is referred to constantly in their press. Control is more important than efficiency. They see no distinction between the exercise of political, military, and economic power. It is a seamless whole, and they see the power elites in those areas as interchangeable. They see US Generals becoming Presidents, and hiring a Cabinet full of millionaire plutocrats to run the country. From that perspective, adopting a standard for communication, controlled by a US company, may be unacceptable. They may develop TD-SCDMA as a third standard. Also, the Chinese have a bad history of lax enforcement of copyrights and patents. Of those 2nd Billion cellphones (most of which are supposed to pay royalties to QCOM), many are Chinese, and I can see a situation where QCOM gets little profit from it. Just wondering, not sure about all this, and (like most investors) I don't like uncertainty. Sure is a lot of uncertainty lately. Is it all just FUD?