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

To: mauser96 who wrote (30510)	8/26/2000 4:25:14 PM
From: Eric L	Respond to of 54805

Luke, << A gorilla does not stop being a gorilla just because the tornado subsides but it can stop being a gorilla for other reasons. Example:-Xerox. >> I agree that "a gorilla can stop being a gorilla for other reasons", and the principle reason (not reasons) stated by Moore is a displacement of the technology controlled by the gorilla by another technology or discontinuous innovation. There is no technology visible that threatens to displace CDMA within the category of CDMA wireless (that sounds a little stupid I must admit) or in the overall wireless market where CDMA remains the fastest growing wireless technology. Moore also refers to substitution threats for gorilla's. I guess we could put GPRS & EDGE in that category (although this does not threaten in the CDMA market) although GPRS & EDGE will take a back seat to CDMA of one flavor or another in the latter half of this decade. I can't comment on the reasons for Xerox losing it's gorilla status. I guess they would certainly have been classified as a gorilla back when, but I was a high school student when they released the 914, a college student when they broke into the Fortune 500 and by the time I started investing, they were somewhat past their prime, and one of my favorite Sales & Marketing Hero's, Peter McCulough had retired. Speaking of Xerox, I have a paperback beside my desk called "My Years with Xerox: The Billions Nobody Wanted" by John H. Dessauer. The back cover of this book published in 1971 states: "If you had invested $1,000 in Xerox in 1960 you'd be a millionaire today." That is very similar (only even more impressive) than the statement on the front inside cover of the RFM: Had you invested $10,000 in Cisco in early 1990 you would now be worth $3,650,000. Too bad my parents passed on the Xerox investment while they were scraping up my tuition. <g> As for Qualcomm, I guess we might worry about them being a Chimp. We have had some well constructed posts here in the past advancing that thought and we have had some very good posts recently comparing Qualcomm to Apple, with some equally good responses back. I personally don't buy the Chimp bit (any moment I expect "tekboy" to step in here and call them a Turkey). As long as CDMA continues to gain market share, which it does virtually every quarter, I consider Qualcomm to be a gorilla, and CDMA not just to be a niche market within wireless. I think this changed in January 1998 when the dominant technology in worldwide wireless (then and now) selected CDMA as it's 3rd generation air interface. My own thoughts aside, reexamining Qualcomm's is most appropriate, given the performance of it's stock this year, the transition of it's business model, and several setbacks that CDMA in general has suffered this year. BTW: Perhaps you could do me a favor and check my math below from a post I recently made: ================================ MOBILE WIRELESS SUBSCRIBER STATS ================================ Through end June 2000 Total Worldwide Subscribers (millions) 494.6MM = digital (excludes ESMR) 82.8MM = analog 577.4MM = total mobile wireless (excludes ESMR) CDMA = 67.1MM subs = + 34.2% first to calendar quarters CDMA = 11.62% of all CDMA = 13.56% of digital What I need checked is the % of CDMA v. all wireless, and v. all based on the numbers 494.6MM (digital) and 577.4MM. There appears to be a discrepancy in the percentages Strategis showed in a Powerpoint presentation I linked here a few days back. Strategis is showing CDMA as 14% of all wireless (excluding ESMR) at the end of 2000. I am not the best numbers cruncher in the world (skill about the same as golf), but it won't be the first time I've found a mistake in a reputable research firms Powerpoint slides. I'll go back over Strategis numbers and my sources for the numbers (which I think is their's) and yell if I need more help. I'll also report back if I find the source of the discrepancy (which may be me). Regards, - Eric -