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

To: techreports who wrote (48944)	11/15/2001 4:28:39 AM
From: EnricoPalazzo	Read Replies (1) \| Respond to of 54805

True, if Qualcomm uses it's IP to take market share, then I see gorilla type power (on par with MSFT's power, although technically Qualcomm doesn't control the WCDMA architecture, so technically it may not be a gorilla). Here's the thing, I don't think Qualcomm can use bulling tactics (like not licensing IP to nokia to screw them over or other ASIC companies, ect..) or else the industry will find another technology to standardize around or stick with the current one (GSM). Yes. Fans of Michael Porter will know that one of the four cornerstones of competitive advantage is power vis a vis customers. Power vis a vis suppliers is another. It is obviously helpful to have hordes of small customers with little bargaining power (think Microsoft). It is difficult for a company whose primary customers are themselves huge companies to gain all that much power over those companies. If you were Nokia or AT&T, you'd work very hard to ensure that your suppliers lack proprietary control over an open architecture that you depend on. No one wants their suppliers to have that kind of power over them (just ask most PC OEMs). For this reason, many suppose that having Gorilla-like power over, say, the wireless industry or the telecom industry isn't possible. Now, both Intel & Microsoft have a great deal of power over their customers, even though their customers (OEM's) are very large in their own right. There are two explanations for that, I believe. -One, through the power of branding and (esp. for MSFT) highly differentiated user experiences, each company has insured that the OEM's customers demand their products. In this way, the OEM's are customers in only the most technical sense. In practice, they're just the channel. -Two, when MSFT & INTC were becoming Gorillas, no one really knew how powerful they'd become, so they got a fair amount of slack. From IBM, and also from the other OEM's. Besides, at the time, the OEM's were too busy duking it out with each other, trying to survive, and cripple IBM to care about MSFT or IBM. (Think America, U.S.S.R. and radical fundamentalist islam at around the same time period). This time around, firms are apt to be much more cautious. For this reason, the recent news about the anti-brew really disturbed me as a QCOM investor. It seems like a sure sign that industry tolerance for QCOM power is extremely low. I am not now, nor have I ever been impressed by QCOM's ability to play politics in the wireless industry. Ethan