Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: kech who wrote (116372)	4/7/2002 3:02:42 PM
From: JohnG	Read Replies (1) \| Respond to of 152472

REVISED "Two Faces of Wireless" as revised Two Faces of Wireless--First is user experience and second is Operator profitability FACE 1--User Experience High data rate is a way of providing a satisfactory user experience. Streaming music video, Picture phones, and GPS location map functions require it. a) MOBILE ENVIRONMENT OR FIXED ENVIRONMENT 1XRTT provides good user experience with Rev 0 at a 153 Kbps data rate and an even better user experience with Rev A at a 307 Kbps data rate. 1X EVDO provides a superior user experience at a 2.4 Mbps data rate and a future 4.8 Mbps data rate. GPRS also provides a fair user experience with average 30 to 50 Kbps data rates. b) FIXED ONLY ENVIRONMENT In a fixed location, 802.11b is very capable of providing good user experience at perhaps 12 Mbps FACE 2 --Operator Profitability. Broadly speaking, it is the data capacity of the cell sites that determines operator profitability. Operators must make a profit if they are to survive. Because they compete with each other to provide similar services, they must sell their data capacity at prices not too terribly different from each other. For different operators, covering a set area in a medium city, $100 million or so may provide adequate cell sites to cover the city. However, for a CDMA 1X RTT or 1X EVDO operator, the capacity provided would be several times the capacity provided for a GSM/GPRS operator. Thus, with an equal investment in cell sites, the CDMA operator has the potential to receive several times the revenue received by the GSP/GPRS operator. 1) MOBILE EVNVIRONMENT OR FIXED ENVIRONMENT The CDMA2000 (1XRTT) service provides a very large data capacity. The 1X EV DO service provides an even greater data capacity. UNFORTUNATELY, the GSM/GPRS service provides a very small data capacity. 2) FIXED ENVIRONMENT The 802.11b service provides a very huge data capacity Given this situation, in a mobile environment, both the CDMA operators using 1XRTT or 1X EVDO and the GPRS operators can provide a satisfactory user experience for limited video user applications. For highly demanding streaming music video, GPRS just doesn't do well. A GPRS operator can spend more money and convert to W-CDMA and provide a little better experience than 1X RTT. Unfortunately, the GPRS operator cannot even come close to the potential revenue stream of the 1X RTT or 1XEV DO operator. THIS IS THE RUB!! In a fixed environment, GPRS still fails to compete economically, but it is possible for the GPRS Operator to install seamless blanket 802.11b coverage in fixed locations such as office buildings, airports, restaurants and public places. The GPRS operator can thus make a profit on high data rate applications in those fixed locations. On the other hand, the CDMA 1XRTT or 1XEV DO operator can also supplement his capacity in a fixed environment by offering seamless 802.11b. It is because of the GSM/GPRS capacity limitations that we see Voice Stream, realizing that its GPRS just doesn't have the capacity to allow it to compete profitably. To relieve this problem, Voice Stream is contracting to have 802.11b installed in public locations. Recently VoiceStream contracted StarBucks to install 802.11b in their coffee shops. VoiceStream hopes that, If GPRS won't compete economically in a mobile environment, at least supplementing it with 802.11b will allow them to compete profitably in a fixed public location. Unfortunately for VoiceStream Boingo is now providing 802.11b competition on a nation wide basis. Small 802.11b operators can simply affiliate with Boingo and have their 802.11b service marketed nation wide. Boingo could conceivably even offer the service through Sprint or Verizon (because QCOM ASICS do incorporate 802.11b reception). Thus the "3G on the cheap" strategy of VoiceStream is a little fuzzy because it appears to have little competitive advantage in fixed locations (because 802.11b will be available to all operators) and a huge competitive DISADVANTAGE in mobile situations (because GPRS provides operators with such a low data capacity). Clearly Boingo, if it grows, will become an acquisition target for the GSM operators. The more sane solution for GSM operators is to simply switch to Qualcomm's new GSM1X interface rather than follow the GPRS/WCDMA path. This way, the GSM operators acquire the CDMA air interface with its huge data capacity and can immediately compete profitably with CDMA 1XRTT and CDMA 1X EVDO operators. In Europe, where socialism and national industrial policy discourages competition, GSM operators will only need to compete successfully with each other. Thus GSM/GPRS operators will have increasing difficulty remaining profitable in countries where they go head to head against CDMA. However, countries must adopt CDMA if they are to have the benefits of applications requiring high data rates. It is in the US, Latin America and Asia where we see CDMA competing directly with GSM/GPRS. If consumers love the rich multimedia applications, then GSM/GPRS will face an impossible competitive situation situation. Even voice only competition will be tough for GSM/GPRS because CDMA1xRTT simply has much greater voice capacity per cell site.

To: kech who wrote (116372)	4/7/2002 9:26:04 PM
From: Neeka	Read Replies (1) \| Respond to of 152472

Hello Tom Brush, Below is a series of three posts by Adam Oliensis found this morning on the AOL QUALCOMM message board that thoroughly outlines what users would have to pay for wireless data. He has done a great job of breaking it down by carrier. The implications are obvious. I thought that it would be appropriate to share them with this board. Best M Current wireless data costs.... This data is from Goldman's Wireless Weekly report. I don't know if it will end up being visually easy enough to make the point, but I've boldfaced and underlined the cost/MB stuff which shows that VZ's new Express Network is JUST STARTING to show the cost advantages of CDMA data. There's a LOT farther to go before wireless data becomes a utility, but we are just beginning to walk the path of the elastic price/demand curve(s). At 10mb data AWE costs you $4/mb...Cingular hsa no plan...Voicestream is at $4 and VZ at $3.50 At 20mb, AWE $3..Cingular is gone, VS is now charging $4/MB, and VZ is at $2.80. For more than 20mb, AWE now charges $4.10/mb, VS still at $4 and VZ drops to $1.90/MB...and goes as low as $1.30/MB fo rup to 75mb...so essentially VZ is equipped to handle larger data users while the others make it more prohibitively costly. Again, these schemes will change HUGELY going forward (I remember in 1974 Andy Winger bought TI a calculator for $299! WOW was it cool! Now they're what $4?) Company $plan MB in pln $/MB Additional $/MB AWE Data plan $10 $10 1.00 MB $10.0 $7.7 Data plan $20 $30 5.00 MB $6.0 $7.2 Data plan $40 $40 10.00 MB $4.0 $5.1 Data plan $60 $60 20.00 MB $3.0 $4.1 Cingular Data plan $7 $7 1.00 MB $7.0 $30.7 100SMS $9 1.00 MB $9.0 $30.7 100 SMS included 250SMS $12 1.00 MB $12.0 $30.7 250 SMS included 500SMS $16 1.00 MB $16.0 $30.7 500 SMS included VoiceStream Smartphone $ 3 1.00 MB $3.0 $10.0 PDA $20 5.00 B $4.0 $5.0 Laptop $40 10.00MB $4.0 $4.0 Verizon Express Network $35 $35 10.00 MB $3.5 $8.2 Express Network $55 $55 20.00 MB $2.8 $6.1 Express Network $75 $75 40.00 MB $1.9 $5.1 Express Network $100 $100 75.00 MB $1.3 $4.1 Oliensis More on wireless costs: This table makes it clearer for comparison. The columns don't line up, but if you cut and paste you can line them up. For 75 mb of data it's $100 from VZ, $300 from VoiceStream, $2289 from Cingular (yikes!), and $285 from AWE for each company's MAX plan. Exhibit 2: Data cost for varying quantities of data by operator Dataqy 1MB 3MB 5MB 7MB 9MB 11MB 20MB 40MB 75MBt webpages 18 54 90 126 162 198 360 720 1,350 AWE Dataplan$10 $10 $25 $41 $56 $71 $87 $156 $310 $578 Dataplan$20 $30 $30 $30 $44 $59 $73 $138 $281 $532 Dataplan$40 $40 $40 $40 $40 $40 $45 $91 $194 $373 Dataplan$60 $60 $60 $60 $60 $60 $60 $60 $142 $285 Cingular Datapln$7 $7 $68 $130 $191 $253 $314 $591 $1205 $2280 100SMS $9 $70 $132 $193 $255 $316 $593 $1207 $2282 250SMS $12$73 $135 $196 $258 $319 $596 $1210 $2285 500SMS $16 $77 $139 $200 $262 $323 $600 $1214 $2289 VoiceStream Smrtphone $3 $23 $43 $63 $83 $103 $193 $393 $743 PDA $20 $20 $20 $30 $40 $50 $95 $195 $370 Laptop $40 $40 $40 $40 $40 $44 $80 $160 $300 Verizon Express$35 $35 $35 $35 $35 $35 $43 $117 $281 $567 Express$55 $55 $55 $55 $55 $55 $55 $55 $178 $393 Express$75 $75 $75 $75 $75 $75 $75 $75 $75 $254 Express$100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Oliensis Subject: GSCO exhibit...cost/web page Here's yet another breakdown of data cost per unit from Goldman. Basically for anything over an average of 6 web pages/day Verizon wins hands down, the cost sinking to as low as less than 1/3 of the next lowest competitor's costs for 75mb data/month. Verizon has the best cost structure for anything approaching regular use of the Web. It continues to be my belief that The Web IS the killer app. Why? because the Web ends up providing a wealth of applications which are endlessly flexible and adaptable. Oliensis Exhibit 3:Cost per web page under different data plans, by operator quantity 1MB 3MB 5MB 7MB 9MB 11MB 20MB 40MB 75MB web pp 18 54 90 126 162 198 360 720 1,350 AWE plan$10 $0.56 $0.47 $0.45 $0.45 $0.44 $0.44 $0.43 $0.43 $0.43 plan$20 $1.67 $0.56 $0.33 $0.35 $0.36 $0.37 $0.38 $0.39 $0.39 plan$40 $2.22 $0.74 $0.44 $0.32 $0.25 $0.23 $0.25 $0.27 $0.28 plan$60 $3.33 $1.11 $0.67 $0.48 $0.37 $0.30 $0.17 $0.20 $0.21 Cingular Dataplan $7 $0.39 $1.27 $1.44 $1.52 $1.56 $1.59 $1.64 $1.67 $1.69 100SMS $0.50 $1.30 $1.47 $1.53 $1.57 $1.60 $1.65 $1.68 $1.69 250SMS $0.67 $1.36 $1.50 $1.56 $1.59 $1.61 $1.65 $1.68 $1.69 500SMS $0.89 $1.43 $1.54 $1.59 $1.62 $1.63 $1.67 $1.69 $1.70 VoiceStream Smartphon $0.17 $0.43 $0.48 $0.50 $0.51 $0.52 $0.54 $0.55 $0.55 PDA $1.11 $0.37 $0.22 $0.24 $0.25 $0.25 $0.26 $0.27 $0.27 Laptop $2.22 $0.74 $0.44 $0.32 $0.25 $0.22 $0.22 $0.22 $0.22 Verizon xpress$35 $1.94 $0.65 $0.39 $0.28 $0.22 $0.22 $0.32 $0.39 $0.42 xpress$55 $3.06 $1.02 $0.61 $0.44 $0.34 $0.28 $0.15 $0.25 $0.29 xpress$75 $4.17 $1.39 $0.83 $0.60 $0.46 $0.38 $0.21 $0.10 $0.19 xpres$100 $5.56 $1.85 $1.11 $0.79 $0.62 $0.51 $0.28 $0.14 $0.07 Best $0.17 $0.37 $0.22 $0.24 $0.22 $0.22 $0.15 $0.10 $0.07