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

To: Don Lloyd who wrote (78595)	8/15/2000 5:05:43 PM
From: Art Bechhoefer	Respond to of 152472

Don, of course the competitors have a lot of baggage. That's why it would be desirable for QCOM to make an offer they can't resist. Consider the economics: Would it be better for QCOM to get 5% royalties on 30 million handsets over the next three years, or 2.5% royalties on 300 million? No contest. As anyone knows, sunk costs are just that--sunk. Another way of looking at the problem is to compare with the big three U.S. auto companies. For years and years after World War II, they kept making minor modifications in their big cars--sort of a planned obsolescence strategy, hoping that they would be able to compete with the newer, lighter, better performing, and lower gas consumption cars made in Europe, and later Japan. By the 1970's, small, well made foreign autos had captured most of the growth in auto sales in the U.S. And GM, Ford, and to a certain extent Chrysler, are still playing catch up. If you want to succeed, you come up with a product that is better performing and cheaper--so much so that the competitors are forced to climb on board or get out of the way. Art