Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: DownSouth who wrote (28885)	7/26/2000 11:37:48 AM
From: slacker711	Read Replies (2) \| Respond to of 54805

2. If Spinco controls 3 of the essential patents for CDMA and use those licenses for the x-licensing currency, does that not mean that Spinco has control over who will and who will not manufacture CDMA ASIC chips? I dont think that the numbers that Snyder used were meant to be accurate.... In any case, I think that it is pretty likely that Spinco will be entering into the W-CDMA patent pool. Anyone will be able to produce a W-CDMA ASIC that is willing to pay the royalty rate....or has enough patents to enter the pool. They will be facing heavy competition....my first take is that it is a royalty game. However, I have never adequately understood why Intel is a gorilla game.....they have had several easy substitutes over the years (obviously AMD). It seems that much of their domination is due to manufacturing prowess. This could be the same type of domination that Spinco will possess (the greatest CDMA experience). Slacker

To: DownSouth who wrote (28885)	7/26/2000 11:38:23 AM
From: gdichaz	Read Replies (2) \| Respond to of 54805

DS: Thanks for all the excellent posts on the Qualcomm spin off. On the gorillaness of Spinco, Mike of course is the best judge of that based on past history. One suggestion, in making that decision a key area to examine will be software and "know how". IMO Spinco is in a dominant position on both with regard to CDMA, HDR and position location. As I recall the discussion on this thread covered 3 types of software: 1.the software embedded in the chips themselves 2.the software within the phones (or PDAs or other handhelds) to make the various parts interact effectively and efficiently 3.software that the operators require to make their network function best. My understanding is that Spinco will supply all three. And Spinco will have the knowhow essential to make all of the interrelationships between CDMA, HDR, position location work properly (as well as bluetooth, speech recognition, etc.) and then there will be the add on of whatever is required for GSM and WCDMA. The chips themselves do not make Spinco a gorilla, but I would submit that the software does. The analogy in the case of Cisco is routers and IOS. Best. Cha2 PS And that the Q retains its gorilla status given its lock on essential IPR seems clear. And remember the Q will concentrate on the nexus of wireless data and the internet / intranets. Potential there.

To: DownSouth who wrote (28885)	7/26/2000 11:50:00 AM
From: sditto	Read Replies (1) \| Respond to of 54805

<<This SPINCO = gorilla or royalty question deserves some more discussion, imo.>> The issue will/can not be decided until the 3G CDMA tornado has come and gone. It remains to be seen whether Spinco can build the best CDMA (any flavor) chip sets and extend their control of the architecture. In my mind the critical factor will be the strength of their value chain. I continue to believe the make or break factor is whether QCOM can play "Kingmaker" for the right 3G handset manufacturer. NOK is fighting tooth and nail to avoid a repeat of the PC market where INTC controlled the PC architecture and relegated the PC manufacturers to reseller status. On the other hand, I have to think some aggressive Asian entreprenuers would be more than happy to become the Michael Dell of 3G handsets and leave the handwringing to Jorma Ollila. QCOM should use a big chunk of their growing royalty stream to give their early partners every advantage in the marketplace. How far and how quickly would the NOK brand and value chain degrade if a competitor's Spinco-enabled handset delivered a wireless killer app that couldn't be duplicated on NOK handsets or on the non-CDMA handsets of other competitors?

To: DownSouth who wrote (28885)	7/26/2000 12:14:45 PM
From: Don Mosher	Read Replies (1) \| Respond to of 54805

Two Gorillas: QCON and SPINCO DS, you were right the first time, there are two Gorillas. What is to discuss? Given a sound strategy for patent transfer, if QCOM is a Gorilla, then SPINCO must be a Gorilla. Just as QCOM is a Gorilla because it has a proprietary architecture in patented CDMA technology with high switching costs to competitors' analog, GSM, TDMA architectures because of competitor's inferior features, limited capacity, hard-handoffs, lower data rates, etc., then so is SPINCO. This is the strategic plan of QCOM. In addition, QCOM will seek to extend its reach into new areas where it will dominate through its newer IPR. SPINCO has the same ability as before to shake the value chain by executing its road map that is directed toward ever increasing ASICS functionality and more inclusive features that QCOM had when SPINCO/QCT was a division. Moreover, we know now that CDMA/GSM/TDMA multimodal ASICS are in the plan. SPINCO will still be producing 6th generation chips as their competitors try to get first or second generations chips to function on a CDMA network. They have the software and the know-how, plus relevant essential and enabling patents. This is proprietary architecture with high switching costs that can continue to shake the value chain. Cross-licensing does not provide the know-how or the software. It changes nothing. QCOM still gets royalties; SPINCO still controls the value chain of ASICS. I hope this helps. DS, you have done us all a wonderful service through your posts. Don