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

To: Wyätt Gwyön who wrote (123440)	8/22/2002 10:18:21 AM
From: Jeff Vayda	Read Replies (1) \| Respond to of 152472

Gee MM, you use a print add comparison as basis for your conclusion 1X does not supply additional capabilities over other technologies. Good work. Jeff Vayda

To: Wyätt Gwyön who wrote (123440)	8/22/2002 11:20:56 AM
From: qveauriche	Read Replies (2) \| Respond to of 152472

Mucho- You are right that the consumer could care less whether its 1X or GPRS. The consumer will care about performance and applications. It is of course true that there is nothing unique about the CDMA "air" that makes it more or less hospitable to one application or another. But where my understanding parts ways with yours and the MSDW report which is predicting a GPRS explosion next year is that in actual application 1X will perform the applications at a significantly higher rate of speed. MSDW says speed doesn't matter, only applications matter, but there is a point beyond (or beneath) which where speed is the differentiator. Let's take this a step at a time and see if we can agree. 1. The GSM carriers are capacity constrained at present. 2. GPRS, unlike 1X, must use the existing capacity of a GSM system for its data transmission, thus leaving less over for voice than was the case prior to its arrival. 3. As the GSM carrier has so little extra capacity to lend to the GPRS data usage to begin with, GPRS speeds will slow dramatically with anything approaching a meaningful consumer acceptance of the service. All the while more and more voice calls are dropped or cannot be connected to begin with. 4. To alleviate this problem, some GSM carriers (most notably China Mobile) have publicly stated that the achievement of the advertised data throughput rates for GPRS will effectively require a doubling of the number of existing GSM basestations within a given GSM network. 1X,by contrast, actually adds to voice capacity in addition to providing the bandwidth needed for data transmission. 5. Thus to offer speeds comparable to 1X (but not 1X evdo which is coming soon) the GSM carrier, in addition to the admittedly relatively cheap upgrade to GPRS, the not cheap upgrade to EDGE, and then the enormously expensive transformation to WCDMA, must now also build yet another 2G GSM system of the same size as their existing network. 6. GSM carriers are already cap-ex constrained, and face tremendous cap-ex costs in the future if they stick to their current migration plans. The construction of yet another GSM network equal in size to what they already have wasn't part of the plan. Even if they do it, so that GPRS has speeds comparable to 1X, the cost of the service won't be competitive because of the extra cap-ex expense that must be recovered, and the higher operational costs of the system. 7. And then there is the matter of market results to date. You are well aware that GPRS has received a cool reception wherever its been launched. Its proponents are desperately arguing that there isn't a problem with the technology, but rather that there simply isn't any demand for wireless data. With each successful 1x launch that claim rings more and more hollow. Mucho, its kinda like this. Think of GPRS and 1x as two equally well stocked department stores. They both offer the same goods. The 1X department store, however, has 15 checkout lines open 24 hours a day. The GSM department store has but 2, and sometimes one. So 1X is the differentiator with respect to the quality with which the applications can be delivered. To such a degree as to place the GPRS carrier at an untenable competitive disadvantage. If this analysis is not correct, and GPRS in fact affords the GSM carriers competitve cover until the arrival of 1X evdo, then the dream is deferred yet again, and in my view with unfortunate implications for the fair value of QCOM equity.