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

To: Judith Williams who wrote (44028)	7/2/2001 10:11:57 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Judith, I have been working under the assumption, perhaps wrongly, that for an architecture to be open, it had also to be a de facto standard. I think you got it right when you mention that it's wrong. :) Think of all the companies marketing applications software whose architecture was not selected as the de facto standard. All of those architectures are open. --Mike Buckley

To: Judith Williams who wrote (44028)	7/2/2001 12:30:27 PM
From: Eric L	Read Replies (2) \| Respond to of 54805

Judith, << But I have been working under the assumption, perhaps wrongly, that for an architecture to be open, it had also to be a de facto standard. >> I do not feel that way. A ways back sditto offered a good brief definition of, and differentiation between, de facto and de jure standards. This is also know as a de facto standard (one the marketplace has settled on) as opposed to a de jure standard (one a standards setting committee has settled on). Message 14046458 He nailed it, very concisely. He went on to say: Moore is saying the Gorilla needs to have a de facto standard. I agree that in order to become a Gorilla that the beastie needs to have their standard be the one the marketplace has settled on. However, a standard can be de jure, or de facto, to qualify as "open" and no official standards body has to sanction the technology for it to be "open", although in some industries (wireless) "open" and standardized is pretty much requisite, and so Qualcomm standardized their technology rather early on. I recall a few excellent earlier posts on the subject of de facto v. de jure standards on this board (can't recall who posted and haven't attempted a more exhaustive search). This board was in existence for some 6 months before I discovered it, although I was doing a solo analysis of Qualcomm as a Gorilla candidate, while this board was conducting the same exercise on Qualcomm. By late 1998, I had come to the conclusion that Qualcomm was a potential Gorilla in wireless mobile telephony, was a gorilla of cdmaOne, which was in hypergrowth at that time, and that they were a threatening chimp in wireless sector overall - still are, IMO, although many would disagree (and I debate with myself on this). At the same time, I decided that Nokia was nothing more than a prince, and so I dumped my 3 year-highly profitable position in Nokia and used the proceeds to acquire a position in Qualcomm. On a valuation note - even though I am a 1.) <g> - Qualcomm enjoyed the most "sensible" P/E on my watch list, and in fact became the company with the most "sensible" P/E (other than INTC at the time) of any one of the companies I held, and that was a decision factor in my move. Moore wasn't much help on my decision. He really didn't touch on wireless in the first edition, and wasn't much help in the then unpublished revised edition when he stated: Is CDMA a better standard for wireless telephony than GSM? "Who cares? reply the partners - we can only support one, and so Qualcomm licenses CDMA to Ericsson for a combined G3 standard. ... to me showing not much more knowledge of the sector than Christensen did in his (enjoyable and interesting) foray into 3G. For further enlightenment on this subject (de jure v. de facto) last evening I went to the Stanford US-Japan Technology Management web site where Geoff has (had) an excellent presentation stored on standards and the TALC, and in which he references de jure, and de facto standards. My link is: fuji.stanford.edu I couldn't access it. This is the same presentation "Technology Standards and Standardization" (1998) listed here: fuji.stanford.edu I can't access it either. I have a few of the slides on my HD, but wish I'd taken them all down. Part of the problem we have in interpreting "Tech Investing for Dummies" a.k.a. "The Gorilla Game", is that Geoff is VERY sketchy with definitions and examples of industry terms he uses, that form his basic principles. Consequently we have a brief mention of spontaneous standardization on page 11 (RFM - page 10 of TFM) and we have comittee-based architecture being described simply as the opposite of proprietary architecture, which itself is basically described in a few sentences. We also have a single sentence or two describe "closed" as opposed to "open" architecture when we are dealing with proprietary architecture ... ... and so it is left to us to interpret. BTW: I owe Mike an answer on DoCoMo being pretty much mandated (in Japan) to open up 'i-mode, and although I have fuzzy recall on what that entails, I am searching for a definitive back up article or two for that. - Eric -