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

To: hueyone who wrote (118818)	5/15/2002 6:22:56 PM
From: Maurice Winn	Respond to of 152472

Huey, you are right that to increase sales right now requires a cut in price as per supply and demand laws. My point was that to increase sales over the next 5 years as people become wealthier doesn't require a cut in prices. As people's incomes rise due to leaving the paddy field and joining the modern China economy, they find they have a bunch of money and are able to buy a CDMA phone. No price cut in the phone is necessary to make that sale. With goods with zero or very low marginal cost of production [software downloaded from cyberspace for example or installed on a new personal computer by Dell], companies can increase their sales with no increase in costs. Their profits per item therefore zoom because their costs are spread over many more units. Competition is irrelevant - the existing market shares continue, but the pie gets bigger. It's a bigger pie matter, but with a pie that costs nothing to make bigger. It's not like producing another million Lexus cars, each of which has a large marginal cost of production. Mqurice