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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: limtex who wrote (103466)	8/30/2001 7:02:54 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 152472

Lim, I reckon I'm realistic. With 1 billion subscribers to mobile phone services certain in two or three years, we are already into some big numbers. China has only 100 million of 1.2 billion on line now. India has [almost] none. Everyone wants CDMA because it is spectrally more efficient and everyone likes to communicate. Who can afford it and who will be able to afford it by 2010 are what matters. We know who can afford it now because they are [mostly] already customers. So, we need to extend some price-elasticity lines and see where we end up. This is not like computers for which most people really don't have much need, or at best a limited couch potato kind of need. EVERYONE, including deaf and blind people, wants to communicate and they need CDMA to do it. [Hermits and some others excluded]. Whether they can afford it is another matter. We don't need the whole 5bn to get to where I said. I'm just saying all those people DO want CDMA [whether they know it or not and whether they can afford it or not]. The numbers [barring calamity] who can afford CDMA are going to increase over the next decade. It's nice to know that there is a huge number of people waiting for CDMA to made economic enough to fit their world. If economic forces continue as has happened for the past 100 years, most of those 5bn will be able to afford CDMA service by 2010. There are already 500 million cellphone users so cellphones are already way into the bell curve of human mass markets. The centre of the human bell curve is not far away once we are up to 500 million. We are entering the massive explosion of demand realm when we near mid-bell curve territory. It is vital to remember than cellphones are not like Zip drives, cars or even televisions which are have limited demand and high prices and limited functionality. A tv costs a lot [compared with a cellphone of 2010 design] and can do almost nothing except sit there and be gawped at, yet people buy them by the billion. So we will not saturate the market by selling to the first half of the bell curve [which happens with cars and many other things]. We will race through the whole swarm of humanity with CDMA phone bells ringing [and probably singing]. That price-elasticity/functionality nirvana is nearing. Then, everyone wants to upgrade! With cheap phones, they will be upgrading every year or two. They are already doing that with expensive phones with limited improved functionality. Keep in mind that the inherent cost of a cellphone is a few dollars [the plastic, lithium, ASICs, electronics, display and assembly are very cheap]. Think of a television set, which weighs many kilograms and a CDMA Samsung phone or Kyocera 6035. These are inherently very cheap to make [design costs notwithstanding - those are unit costs which with mass markets and good market share become trivial]. The cost of phones is inherently so low that people are thinking of making disposable phones [like disposable cameras]. The old days of high margins, high minute prices and limited numbers of users who watched their MOU carefully are coming to an end. 6-Packs will be on sale. The key to the phone is the ASIC. That's QUALCOMM's baby. Then there are the services. That's QUALCOMM's baby. [BREW, Eudora and all those other things from PayPal to PacketVideo, SnapTrack and inViso]. Then there's Globalstar, which is QUALCOMM's baby. Communication is more important to people than transport. The car industry and airline industry were good. But CDMA and QUALCOMM are big time. With CDMA, people won't need anywhere near as much transport, much of which is really just to move data and communicate. QUALCOMM won't have done it deliberately, but they are about to pick up [my uninformed guess] the assets of Globalstar at a huge bargain. The cost of operating a gateway isn't all that much [the current gripe about Globalstar]. A Machiavellian would suspect the whole demise of Globalstar was a con job to get hold of the assets cheap. Overprice it, make people give up. Few understand it. Take the assets to court and pick them up for a song with 8 years of satellite life still to run. Vodafone won't like that to happen so I imagine they will have a piece of it too - they won't let QUALCOMM get away with it too cheaply. A carve up with Vodafone, Loral and QUALCOMM being the main beneficiaries. The sky's the limit for QUALCOMM. $1000 a share is reasonable by 2010. The current world financial woes are like Korea in 1998; sure it's really bad but that's not CDMA's problem. CDMA just carried on right through the Korean problem when people in this very stream were saying woe-unto-us. About Korea. CDMA is about communication and cheap communication at that. In financial woe time, people go back to basics. Communication [even if via a new technology] is basic. They will continue to buy it in preference to nearly everything else. Okay, let's be realistic. There aren't 5 billion people who want CDMA. By 2010 there will be 6 billion people who want it. Most of them will be able to afford it too. Mqurice