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

To: Eric L who wrote (48662)	11/7/2001 4:26:21 PM
From: carranza2	Read Replies (1) \| Respond to of 54805

That reminds me of that story about Irwin in the room full of filing cabinets that came out of Cannes last year. So, are you going to keep us in suspense, or what? What story?

To: Eric L who wrote (48662)	11/7/2001 5:22:26 PM
From: gdichaz	Read Replies (2) \| Respond to of 54805

Eric L: Re: <<Suppose for instance that Nokia is successful with the 1x chip they have developed and they continue to grow cdma market share as they are doing right now. Suppose that Samsung, when the technology matures develops and uses their own 1x chip (as they had started to do with IS-95B), and MOT does likewise. 1x is going to be around for a loooooooooooooong time and this is not beyond the realm of possibility. Market share could go from 80+% to 50% overnight, in a market that is growing not growing super fast . Add to that the fact that Qualcomm is banking on a very aggressive 50% market share in GSM/WCDMA chips (where they will be in competition with some really heavy hitters). When they step into the GSM/WCDMA world the competitive advantage that they accrue by being the CDMA gorilla is sharply diminished. Thinking out loud and FWIW.>> As the old saw goes, "you may be right", but that of course means that you may not. <G> On the basic point you make that the Q might be smart to spin off the chip making business, I agree with this modification: Right now it is probably just as well that Qualcomm kept the chip design business in house and close. There are several new chips (and most importantly, related software) essential to the mobile wireless data tornado related to the internet/intranet and wireless nexus. Keeping the key components of that for both the infrastructure requirements and the "terminals" (way beyond simply "phones" BTW) under close control and supervision in house seems sensible. Perhaps a couple of years or so from now, once the WCDMA aka UMTS hurdle is crossed, then perhaps a spin off would be a good idea. Curious, to what extend does Nokia rely on Texas Instruments for its "Nokia" chips? Assume the "design" is a collaborative one with Nokia in the lead, and active TI participation. [Note that is not what Qualcomm does - the Q uses foundries, and I assume TI is more than a foundry for Nokia] Would much appreciate your informed view on this. My interest relates to the Q's possible competition in chips. And in that Samsung would seem to be the most realistic major competitor down the line, with Texas Instruments an unknown and puzzling possibility. Don't see any way Motorola could be a threat based on its track record and that MOT may actually get out of the chip business itself in the not too distant future. And BTW, do you see Nokia keeping its chip design in house as essential to Nokia? Best as always. Cha2

To: Eric L who wrote (48662)	11/8/2001 2:00:08 AM
From: techreports	Read Replies (2) \| Respond to of 54805

Suppose for instance that Nokia is successful with the 1x chip they have developed and they continue to grow cdma market share as they are doing right now. Suppose that Samsung, when the technology matures develops and uses their own 1x chip (as they had started to do with IS-95B), and MOT does likewise. 1x is going to be around for a loooooooooooooong time and this is not beyond the realm of possibility. Market share could go from 80+% to 50% overnight, in a market that is growing not growing super fast . Add to that the fact that Qualcomm is banking on a very aggressive 50% market share in GSM/WCDMA chips (where they will be in competition with some really heavy hitters). When they step into the GSM/WCDMA world the competitive advantage that they accrue by being the CDMA gorilla is sharply diminished. Thinking out loud and FWIW. I've been thinking about the ASIC business as well. It's a major part of Qualcomm's business and it needs to be successful if we're going to expect to get a good return on QCOM stock. a few things.. - china agreed to use Q ASIC exclusively. Can you say barrier to entry? although the 2.65% royalty on domestic sales may cancel that great advantage out making China neutral? - Will Qualcomm be able to use it's power? Like Intel and Microsoft do to get what they want. Unlike the two PC gorillas, Qualcomm can't afford to piss any OEMs off. - If BREW becomes popular, which ASIC will support and run BREW applications the best? - Could be wrong, but i think Q ASICs are the only ones that support Snaptrack. If a carrier decides to use Snaptrack for their GPS technology, then they are essentially locking themselves into Q's ASICs. Either way, I think Sprint is going to use Snaptrack.. - Samsung and Motorola have other things to worry about and I doubt their R&D spending on ASIC is as strong as Qualcomm's. Both companies will have to do some major thinking as to whether it makes sense financially to compete with Qualcomm's R&D budget. Qualcomm's ZIF technology seems promising. I do agree that if Nokia finally develops their own CDMA asic or if Samsung does, that could drastically change Qualcomm's fundamentals very quickly. cdmatech.com QUALCOMM CDMA Technologies Introduces Revolutionary Radio Frequency Architecture for CDMA Market — radioOne™ Zero Intermediate Frequency Radios Will Reduce Complexity, Cost and Size of Multi-Band and Multi-Mode Handsets — San Diego — December 18, 2000 — QUALCOMM Incorporated (Nasdaq: QCOM), today announced radioOne™, a revolutionary new technology for Code Division Multiple Access (CDMA) transceivers that uses Zero Intermediate Frequency (ZIF), or a direct conversion, architecture for the wireless handset market. Unlike traditional CDMA radios, which convert radio frequency (RF) signals to and from baseband in multiple steps - converting RF to or from intermediate frequency (IF), then converting IF to or from baseband - ZIF radios convert incoming RF signals directly to or from baseband analog signals. This direct conversion eliminates the need for large IF Surface Acoustic Wave (SAW) filters and additional IF circuitry, which significantly reduces the bill of materials (BOM), resulting in cost-effective multi-band and multi-mode handsets that can be produced in smaller form factors. "ZIF architecture has been the holy grail of many wireless communications standards," said Don Schrock, president of QUALCOMM CDMA Technologies. "By developing radioOne, QUALCOMM will help enable the rapid and cost-effective development of third-generation world phones capable of operating in multiple bands and modes." Until now, direct conversion for CDMA has been technically challenging because of the stringent interference specifications with which CDMA phones must comply. radioOne solves this problem by using new, advanced techniques developed by QUALCOMM CDMA Technologies (QCT) to enable high-dynamic-range receivers. The radioOne technology also incorporates the frequency synthesis and passive elements used in converting baseband signals to and from RF. Specifically, the radioOne chipset will incorporate the transmit local oscillator and phase locked loop for CDMA as well as all of the active RF circuitry used to process Global Positioning System (GPS) data. As a result, the parts count and area are reduced approximately 50 percent compared to other available solutions. A single external local oscillator is used for the CDMA receiver, which will provide the capabilities needed to operate on systems around the world, and will simplify the procurement of parts and the cost of designing CDMA handsets. In addition to size and manufacturing cost benefits, radioOne radios will provide an estimated 20 percent improvement in talk times for CDMA handsets. In combination with the CDMA2000 1x mode, radioOne technology will enable handsets to increase standby times approximately five-fold over currently available CDMA handsets. radioOne technology is expected to be incorporated in QCT's next generation of CDMA2000 1x/1xEV/GPS and Wideband CDMA (WCDMA)/GPS products, with chip sampling expected to begin in the fourth quarter of calendar 2001. Applications for other third-generation multi-band and multi-mode wireless standards, including Global System for Mobile Communications (GSM) are expected to follow. P.s. what do you mean 1x will be around a long time? I thought the next upgrade is 1x-ev or eo? there's also hdr if BREW can't get enough support, i wouldn't mind seeing qcom give it away to help build stronger barriers around their asic business..