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To: foundation who wrote (38506)	1/27/2001 12:00:40 PM
From: quartersawyer	Respond to of 54805

^GPRS an inevitable step in GSM evolution.^ ^Anyone?^ It may "betray a fundamental ignorance to question its historic inevitability", but common sense and a little historic perspective make it obvious that the GSM base is inevitably to be milked, CDMA delayed.

To: foundation who wrote (38506)	1/28/2001 9:39:42 AM
From: Eric L	Read Replies (1) \| Respond to of 54805

re: GPRS - Potential impact on CDMA takeup? << I've considered GPRS an inevitable step in GSM evolution >> You are fortunate. There are many investors who considered that narrowband CDMA was the inevitable migration path for GSM carriers in existing 900/1800 MHz spectrum. When reality struck, and GSM turned out not to be Toast the valuation of a stock we follow closely here was dramatically impacted. Today, the whole sector is significantly affected by overzealous projections of subscriber growth and wireless data takeup, and legitimately concerned about availability of technology to support wireless data. << I'm re-evaluating that premise at present >> How far has that reevaluation taken you? Are you of a mind that there could still be a migration path through narrowband CDMA? How would that be achieved? Or perhaps you think this will accelerate UMTS? You posted to me on another thread that "it seems that Operators may be motivated to blow off GPRS and transition directly to UMTS". We have just come off a year in which GSM growth dramatically exceeded forecast and CDMA growth dramatically missed forecast. GSM gained market share. CDMA lost it. That trend does not appear to me, to be changing. CDMA currently has 12% worldwide market share, GSM 69% (analog & digital). Earlier this year Bill bold of QUALCOMM presented a slide that rather accurately showed 465 million (digital) subscribers and he offers a projection of 1.8 billion end of 2005 broken out as follows: 1999 2005 GSM 62% GSM 44% PDC 15% PDC 02% CDMA 13% CDMA 40% TDMA 10% TDMA 14% Note: He shows 2005 CDMA as 75% CDMA & 25% 3G CDMA (i.e. 10% of total subs). On this thread, we look at hypergrowth (tornado) of technology in evaluating investments, and subscriber growth was an important metric in determining that QUALCOMM was the gorilla of CDMA, given both the hypergrowth that occurred from 1997 through end of 1999, and the fact that they have enjoyed proprietary control of an open architecture. For this reason, perhaps you would care to share some theoretical forecasting of CDMA (any flavor) takeup with the thread based on your reevaluation? When you are ready of course. In doing so, you might want to use Bolds slide as a reference, bearing in mind that when it was prepared that Qualcomm was looking at achieving 100 million subscribers by year end 2000 and although final numbers aren't in we are probably in the vicinity of 85 million I hope). << I've seen no confirmation that anyone can make handsets work ... they were to be available in quantity Christmas 2000 ... then they were to be available spring 2001 ... now the word is that they should be available Christmas 2001 ... but I've read that this is too optimistic, and Spring 2002 is more realistic ... Lots of talk. Lots of assuring. Lots of smoke. No handsets. >> The industry seems to be always waiting for handsets. So it was with GSM in 1991, with CDMA in 1995 and with TDMA/GSM & 1xRTT now. Indeed, until recently there was a single GPRS handset Motorola's Timeport p7389i (not the commercial version P7389i to be introduced mid year). This handset might be equated to the 1xRTT handsets available in Korea today since it was designed before standards were completed for GPRS, but it did allow commercial service to launch on schedule last June. The carriers were in fact expecting some limited commercial volumes in time for Christmas 2000, although they knew by September that this would not happen. It then appeared that Motorola would play hero with either a more advanced p7389i (not P7389i) or an early prerelease T260. Sonera actually took shipment and rushed phones into retail shops, obviously with insufficient integration testing. Not a real cool maneuver for an operator of their experience. << It's easy to speculate where problems exist - speed, heat, energy. >> All of the above and add processing power, display, and storage, technology to the equation. Solved by new technologies for which there is a shortage of components. Maybe 3 or 4 of the requisite 30 or so. << Will a 14kbs GPRS handset - if they can make that function - be a success? >> 14 kbps? No. Which is why only about 20 carriers have implemented or will implement HSCSD (which in retrospect may have been a very sensible move). But whats with this 14 kbps? Single downlink? GPRS (when fully commercialized in its early first commercial phase... which it is not) will have a raw data speed of between 28 kbps to 40 kbps, and when data optimization is added will have an effective throughput of between 50 kbps & 100 kbps (V.90 to ISDN speed) ... the equivalent of what 96% of US Internet users are achieving on their powerful desktop clients today. The typical configuration of a GPRS handset or WID will be 4 timeslots down and 1 up although there will be at least 1 4+2 configuration shortly. To the best of my knowledge there are no GPRS modem cards yet announced and only 8 handsets, or WIDs announced: Vendor Model Date Due Freqcy Bands Class (DL+UL) Ericsson R520m Q1 2001 900/1800/1900 4+1 Motorola T260 Q4 2000 900/1800/1900 2+1 Motorola P7389i Q2 2001 900/1800/1900 ? Motorola 007 Q2 2001 900/1800/1900 ? RIM BB Q1 2001 900/1800 1+1 or 2+1 RIM BB Q1 2001 1900 1+1 or 2+1 Sagem MW959 Q4 2000 900/1800 2+1 or 3+1 Samsung Q100 Q1 2001 900/1800 4+2 Trium Geo Q4 2000 900/1800 2+1 Assuming that these devices meet there commercial availability targets (and they might not depending on availability of critical components and testing of preproduction units), there will be a ramping period before sufficient volumes before distribution channels are filled. GPRS operators however, do have an advantage im this regard over cdmaOne operators migrating to 1xRTT however, since 25 networks are commercially launched and an additional 16 are live and testing. This greatly simplifies integration testing network wide, and this despite the fact that 1xRTT ostensibly offers an existing carrier a much more seamless upgrade path to 2.5G (or if you will, in American parlance, an interim step to 3G). << Why do we accept that GPRS will function at all? Must we rely on "confidence" - on faith? >> One doesn't have to. One can be in denial. Historical precedence of the application of technology to mobile radio transmission evolution might be considered however, and you can look at either the GSM or CDMA examples for starters. In my case, despite the fact that many thought CDMA would never be commercialized, and every missed date was broadcast everywhere, I had confidence that it would be commercialized. At that time my confidence lay less in QUALCOMM than it did in the fact that AT&T (now Lucent), Motorola, and Nortel, were committed to making it work. In retrospect QUALCOMM made it work, with their then smaller value chain, which is just one of many reasons I am long QCOM and consider it a core holding. In this GPRS case we have ALL the major vendors of mobile wireless infra and handsets including QUALCOMM's largest customer (which I believe is Samsung) committed to make it work. I deal in probability to a great degree when investing in technology, and I would venture to say that the probability is very high that it will work and work well ... although I am not sure exactly when, anymore than I was with CDMA back in 1994. In the interim a very large group of influential and vocal carriers will whine, moan, and bang their shoes on the tables of the major handset manufacturers, and perhaps create opportunities for the 2nd tier. - Eric -