Fred,
Re: QCOM (NOK) - Wireless Subscriber Growth - 3G
Sorry for late response. I posted this, this morning, or so I thought ... looks like SI got the better of me ... again.
<< I'm not trying to pick a fight here >>
Good, because we would probably be on the same side as regards 3G takeup.
<< what hard core numbers can we expect from 3G once the build out happens? >>
Any numbers that are available at this point are speculative.
We don't even know right now when standardized 3G will launch or more importantly, will start to ramp, with any certainty.
I am including at the end of this post a recent press release from "Wireless Week" mentioning a report from EMC, who has the hardest (current) subscriber database of anyone in the industry, and probably the best inputs from the industry, re 2.5G & 3G forecasts.
<< Seeing that NOK is already showing saturation in the handset market >>
Well, I'm not sure there is saturation in the handset market.
One thing to note, however, is that the growth rate of wireless subscribers peaked last year.
I've pointed that out before on this thread.
Preliminary numbers for 2000 indicate that sub growth declined to < 50% from 54% in 1999.
We do however continue to see absolute growth in subscribers and this may continue for perhaps a few more years, but EMC is projecting an actual decline next year.
As for saturation, the world is only at about 12% penetration and their is ample room to grow.
Replacement cycles, however, are shortening, and I'll comment on this in my Nokia report.
As for NOK, they pretty much hit their unit numbers and their market share increases are stunning (and may be difficult to sustain).
Analysts were disappointed, but were using some high side forecasts. Over zealous.
Jorma Ollila may have contributed to this by forecasting 1 billion subs by mid 2002. This is high side and probably over optimistic, but this agrees with Cahners In-Stat forecasts.
EMC is forecasting 1 billion in 2003.
Ericsson is forecasting 1 billion in 2003.
<< Everyone seems to be so "high" on 3G that even if it just misses numbers by a little bit or rolls out 6-12M slower, how will the markets treat QCOM stock holders? >>
3G is not near term. I've said that often. We will see commercial availability in 2002, and launches, but I don't think we'll see anything significant.
Overzealous prognostications of 3G takeup will hurt QCOM, IMO.
I recently posted this (somewhere):
>> 1. Dramatic increase in "messaging" is signaling the near term commencement of a move from voice-centric to data-centric wireless.
2. Early 2002 GPRS and 1xRTT data tornado commence (worst case).
3. Mid 2003 general deployment of W-CDMA will probably commence.
-- I am counting on virtually no W-CDMA revenue to Qualcomm in the current fiscal year (ending September 2001).
--I am counting on negligible W-CDMA revenue to Qualcomm in the fiscal year (ending September 2002).
--I am counting on some small but meaningful W-CDMA revenue to Qualcomm in the fiscal year (ending September 2003).
--I am counting on significant W-CDMA revenue to Qualcomm in the fiscal year (ending September 2004). I expect this to continue to ramp through the end of the decade. <<
Let me add that CDG is projecting that CDMA will be the dominant interface in 2006. I project 2007 earliest.
Here is what "Wireless Week" had to say on the subject. I don't like it, but I think it's reality:
>> UMTS Future Looks Gloomy
Peggy Albright
November 13, 2000
Wireless Week
While U.S. operators are rolling out target dates for their third-generation services, scheduled deployment dates in Europe are looking less feasible.
Last week the London-based industry research firm EMC issued a report concluding that "true commercial UMTS launches" are unlikely to occur in Europe before the end of 2003, primarily due to an expected lack of handsets.
That's a year later than Europe's previously expected launch of public networks planned for 2002. It also is well after U.S. operators intend to deploy the first phase of their 3G network upgrades.
UMTS refers to universal mobile telecommunications services, the European implementation of wideband-CDMA. In the United States, some operators will pursue W-CDMA while others will use interim technologies such as enhanced data rate for global evolution, or EDGE, general packet radio services typically referred to as GPRS, cdma2000 1XRTT or a combination of technologies.
The prospect of any delay in the UMTS launch does not bode well for European operators, particularly in the United Kingdom and Germany, where operator-led consortiums paid through the nose for 3G licenses. Those operators need to offer new revenue-building services as quickly as possible to capture a return on their investment.
Does that spell good news for U.S. operators scrambling to keep pace with European counterparts?
The race to be first - for both operators and vendors - promises marketing advantages. But those who follow, if they use the same network equipment, will benefit from economies of scale. The global partnerships that link European and U.S. companies, however, will feel the fallout from European delays in the United States as well.
As projected deployment dates draw near, skepticism about launching any technology is increasing. First, doubts surfaced about the technical feasibility of EDGE. Now, doubts arise about the scheduling feasibility of UMTS. Some are revisiting the promise of the less-popular EDGE option.
"People are learning earlier than usual this is going to be a very slow, painful process," observes analyst Herschel Shosteck.
EMC says it based its gloomy UMTS report on the still-underdeveloped handset market - it's still too early in the chip and handset development stage for phones to hit the market by 2002. Under EMC's definition, "launching" means a consumer can go to any cellular shop, buy a handset and get services.
But Chris Wildey, vice chairman of the UMTS Forum, says no new technology of this magnitude can be introduced overnight. "We're not expecting a big bang solution because the forum has always said that commercial operations will start in 2002, and will develop into a mass market as we move through the following years." The EMC report, and another issued by the GPRS-EDGE-UMTS consulting firm Northstream, suggests that the TDMA-GSM evolutionary technology, EDGE, may revive itself in a delayed UMTS rollout.
But Shosteck's firm maintains its stance that neither EDGE nor cdma2000 will ever be able to achieve the economies of scale that UMTS promises, and the latter option ultimately will prevail over all of them. It's only a matter of when UMTS takes over. Shosteck agrees with EMC that the end of 2003 may be optimistic. <<
- Eric - |
