Lakers,
<< Eric, the power of statistics, and its manipulation. >>
Lakers, the trick in investing (or marketing, or strategic selling), IMO, is to avoid manipulation of numbers and statistics, as much as is humanly possible.
This applies to the examination of a balance sheet, determining valuation, or in this case looking at rate of growth and market share.
When you do these exercises you need to put all your biases aside, and get inside the numbers to the best of your ability.
<< The reason I pick those two dates is because those are the only two time that both gsmworld and cdg have their time crossed and close two the term of two years. >>
With a little more foresight you could have saved Julian Herbert's numbers from previous years on gsmworld, or attended the US conference each where he has presented them every year since 1995, in preparation for Cannes, and saved the conference notes, or dug down a little deeper on the gsmworld site. <g>
<< Here are the numbers from Dec 99 to Mar 01. Global: CDMA 50.1(mil) to 0.4(mil) increase of 80% GSM 259(mil) to 503.4(mil) increase of 94%. So GSM beat CDMA right? >>
Right. Actual growth, rate of growth, and market share growth. In the process as analog declined, the total market share of GSM for total percentage of either worldwide digital subs (including PDC and IS-136 TDMA and CDMA), or all subs (including analog) increased rather substantially while CDMA decrease marginally (not substantially, not dramatically, but a decrease in market share none the less).
<< Dec 99 to Mar 01 >>
Too bad you didn't run them from Dec 98 to Mar 01. CDMA case is slightly worse (market share wise) than I described above. Rate of growth worldwide annualized didn't take the hit till Q3 2000, but the trend started Q1 2000 as a result of GSM parts shortages Q4 1999 precipitated by serious underforecasting of the GSM carriers early 1999 and in turn underforecasting by the big three to their vendors. CDMA got hit in reverse. Excess inventory in channels Q1 2000. Qualcomm gave proper guidance downward and that started the spiral down from 200 to todays number plus or minus 20%, and since they were the poster boy of excessive exuberance in wireless, the sector crashed with them, ahead of the other tech sectors.
<< But look at the number a little closer. >>
OK. Let's do that.
<< Asia GSM 69.6 mil to 155.4mil increase of 123% - CDMA 28 mil to 39.6 mil increase of 41.5% >>
Same exact comments apply.
<< So as you can see Asia is the killer for CDMA in the past two years. >>
Well, when you add in Europe and EMEA to the Asia situation, it does offset the Americas where CDMA (NA) or TDMA (LA) has ruled.
<< However GSM and CDMA are not in direct competition, with GSM enjoyed the huge success in China. >>
What year did Qualcomm add China to their globalization? Nokia added it in 1985, and suffered through a dozen years without substantial reward. The forecasts out of China are staggering. The stakes are huge and guaranteed for no company. Qualcomm deserves great credit for their "dogged perseverance". So does Nokia.
Interesting to watch and tough to project. 50 million subscriber lines over four years isn't going to put a dent in worldwide market share, so with a Qualcomm hat on, I say we better hope its higher, and watch how 3G technology decisions flops out, although any which way, that will be for all one, two, or most likely all of the three flavors of CDMA, so Qualcommers win regardless ...
... but yes, now there is head to head competition.
<< CDMA suffered subsidy setback in Korea, >>
Sh** happens. GSM is suffering reexamination of subsidies in Europe right now. It will be examined increasingly throughout the world. You can't be dependent on one or two countries to win in this game. So one country banned subsidies. So what? You pick it up elsewhere. In the case of CDMA, that's the Americas, Australia, Hong Kong, Singapore, India, Africa.
The other setback in Korea if you're a cdma2000 fanatic is the choice of 3GSM technology by SKT & KTF. Korea is pretty saturated, and eventually some portion of subs will migrate from cdmaOne/cdma2000 to 3GSM.
As for setbacks, GSM suffered in the US because of Nextwave and DCR driving C block prices out of site, and both seeking bankruptcy protection, thus leaving GSM with a huge whole in their national footprint, that the filled by winning back licenses in the original C Block reauction. So what's happening now? VoiceStream continues its buildout, increasing coverage and capacity, and AWS has converted to a 3GSM migration path, with Cingular likely (not a given) to follow suit. Parity is achieved and you have real head to head competition.
<< and tough competition from NTT in Japan ... So the number is no way a reflection of the head to head fight between the two. >>
Very tough. and it will continue to be very tough as DoCoMo and J-Phone migrate subs from PDC and PHS to 3GSM, but again its all CDMA, right? Now we will have fierce head to head competition with KDDI caught in the pincer of the coopetition of J-Phone and DoCoMo that GSM is famous for.
One thing that 'i-mode' proved is that it is not about data rates, and the other thing it proved is that CDMA WAP is Crap, just like GSM WAP is Crap.
DoCoMo 'i-mode' also proved that a proprietary architecture and a proprietary business model with well documented specifications can work in the early stages of technology evolution, provided that superb marketing expertise is applied. This was Clayton Christensen's point in the Hambrecht sponsored audio presentation that I linked here last week.
<< Now let's look at in NA and SA, - NA: CDMA 16.5 to 33.843 105.1% & GSM 6.1 to 11.6 90% - SA: CDMA 5.1 to 15.9 211.8 % to GSM 0.71 to 2.4 338% ... The two combined in NA SA = CDMA 21.6 to 49.7 130 % v. GSM 6.81 to 14 105% ... Granted GSM in SA is a short story therefore the number is hardly be used for comparison. >>
You have missed something here in looking at the numbers.
Forget SA for a moment.
GSM in NA used to be a short story, but now with a national footprint complete, thru M&A, buldouts of licenses acquired 16 months ago still in progress, a national upgrade to GPRS virtually complete, backing from DT, roaming agreements with the world, and one of the best management and engineering teams in America, and superb partnerships, VoiceStream is a power to be reckoned with.
AWS is converting to GSM & 3 GSM and so is Rogers of Canada, and likely Cingular will follow. Its new ballgame in NA.
Now lets look at SA (LA) where TDMA has ruled and CDMA is making good headway in rate of growth if not actual growth.
ANATEL changed everything. GSM is spreading like a weed. In 18 months networks in LA have increased from 5 to 18. Build outs everywhere. Watch TIM in Brazil and their other properties. Watch analog heavy Mexico. Its new ballgame in NA.
<< However GSM and CDMA are not in direct competition >>
Now they are.
CDMA penetrated China (and India).
<< However GSM and CDMA are not in direct competition >>
Take a look at where they have been in direct competition. Hong Kong, Singapore, Australia, Africa. What is the result?
<< It is certainly not a reflection of who is the open standard, >>
When you were on the GSMA web site, and the CDG site, you looked at the wrong numbers.
You looked at subscriber numbers.
What drives subscriber numbers?
Technology adoption by carriers
You should have been looking at year by year adds of carriers and networks on air,
That's what drives the sub numbers.
Technology adoption by the carriers.
Subs don't buy technology.
Subs buy end results.
The original Three C's govern. Coverage, Capacity, and Cost.
In China the special cost consideration granted Unicom, more than "technology" and coverage is assisted by dual-mode and existing GSM coverage - a trick out of the GSM book.
Carriers favor open standards.
Those are the numbers you forgot to look at.
You did not compare how many carriers adopted GSM instead of cdma0ne/cdma2000 ever since Korea mandated CDMA and vendor financing determined the technology choice of PCS PrimeCo and WirelessCo (Sprint PCS).
That is why sub growth, growth rate, and market share has not trended the way we might have anticipated.
<< It is certainly not a reflection of who is the open standard (I will touch this later). >>
Oh good. I see you have done that.
I do, believe it or not, have a day job, so you may have to wait a few days for me to get back to you.
In looking ahead, you may want to check your facts on the evolution of the GSM standard between 1982, and 1987. Then look at "The Broad Avenue" approach that was taken in GSM1 in 1987 when requirements were finalized and before vendors were allowed to start participating in the standardization process on an ad hoc basis before ETSI was created in 1998, and the narrowing started to take place in GSM2.
Best,
- Eric - |
