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

To: mauser96 who wrote (27872)	7/13/2000 5:56:30 PM
From: DownSouth	Read Replies (2) \| Respond to of 54805

Cell phones becoming a commodity is a logical (if not sure) thing to happen. The PC is a good model to compare. Remember when NEC, WANG, and a host of others were building PC clones (before the PC/AT)? They all ran some "flavor" of MS-DOS, but had some proprietary architectures. The PC/AT changed all that. Going back further, before the IBM PC, remember...? I am sure you do--TRS80, Commodore, yadayadyada. The industry moved to a standard platform, mostly because of the value chain created around WINTEL. Over time the margins for PCs fell from over 60% to single digits. Many, especially Wang, held onto their proprietary architectures that were "better" than the clones. The Wang was a helluva lot faster than the PC and the PC/AT, with a tru 16-bit bus and an 80286 CPU, rather than the 8086 CPU. But the value chain destroyed the demand for their product. Wang fought that battle for one simple reason--their corporate culture forbade them from being in a commodity market. (Read Dr. Wang's Lessons for a complete treatise on that subject, then read Kenney's Riding the Runaway Horse for the rest of the sad story. Wang finally built a series of clone machines, but tried to maintain non-competitive margins. It lost its business in no small part because of this. NOK is working hard to find the means to maintain its margins in the face of a commodity market in handsets. It will be interesting to watch.