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.

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

To: Eric L who wrote (52914)	11/6/2002 7:12:11 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

With all due respect, the bottom set of numbers is irrelevant to this discussion, Eric, unless it's your contention that Ntel, Mot and Lucent's disasters are largely attributable to their cdma programs. uf

To: Eric L who wrote (52914)	11/7/2002 1:28:55 AM
From: Clarksterh	Read Replies (4) \| Respond to of 54805

Eric - Lies, damn lies and statistics. Quoting the way you do the percent market share definitely falls into the last category. You'll actually find this trick in books on how to manipulate statistics to say whatever you want. I'll admit it is a little complex, but: 1) Anytime you have a group growing rapidly, and that group is divided up into a very small but rapidly growing subgroup (call it X) and another, very large but modestly growing subgroup (Y) you can get a situation where the 'market share' of the smaller group could be falling. (i.e. whenever %GrowthX/%GrowthY<SizeY/SizeX) Given that historical evidence says that percentage growths are much more constant than size this loss in market share is misleading. (At some point the ever shrinking SizeY/SizeX becomes smaller than the much more constant ratio GrowthX/GrowthY - at that point you get a 'minimum' market share. See point number 2) Essentially by the way you quoted data you were missing positive acceleration in market share. 2) You talk of QCDMA's loss of market share in digital. But that is only because you conveniently picked your endpoints. Using your own data it is apparent that more recently QCDMA has been gaining market share. Essentially they just passed through their minimum as described in number 1. 3) Given the above it becomes obvious that almost all overtaking technologies in a growth field go through a sideways s shaped market share curve. Sometimes with more than one dip, but always catching up. As for the value chain, several comments: a) You have conveniently left off the Samsungs of the world b) For the data you provided you are really comparing the network providers (lousy margins) with the handset providers (ok margins) but as pointed out in a) you didn't include the QCDMA handset providers. c) There is nothing that says that the rest of a Gorilla's value chain has to be making a killing. Certainly not true of Microsoft which is indisputably a Gorilla - ask any box provider but Dell. Clark

To: Eric L who wrote (52914)	11/7/2002 9:15:46 AM
From: slacker711	Read Replies (2) \| Respond to of 54805

In 27 months GSM wireless market share has increased by 22.3% (12.6 percentage points) while CDMA wireless market share has increased by 4.2% (½ of a percentage point) and in those same 27 months GSM has increased digital market share by 7.9% (5.2 percentage points) while CDMA has declined 7.9% (-1.1 percentage points). I have to agree with Clark on this one. I know that you frequently look at CDMA's overall marketshare among digital users to see progress, but I dont think this is an accurate reflection of the progress that CDMA has made. It is the equivalent to looking at the installed base of routers to determine of Juniper is catching up to Cisco (or the installed base of Intel's chipsets vs. AMD's when examining the microprocesser market). The overall market for handsets in '02 will likely be FLAT with '00. During that time period, CDMA unit growth will be up 25-30%. This growth might not have lived up to our expectations but it is pretty clear that CDMA has taken marketshare. If you wanted to look at overall revenue generated by handsets, CDMA's marketshare would be even higher since the ASP on CDMA handset is significantly higher than on a GSM handset. As for Q's value chain....it has indeed been decimated. However, if you look at the October 1st Soundview report, you will be hard pressed to see a huge distinction between the performance of the CDMA and GSM infrastructure markets. Both have been equally terrible over the last couple of years. research.soundview.com I also think that one problem with your list of Q's value chains is the hugely varied nature of the chain itself. CDMA has a much longer list of handset manufacturers than GSM ever did. Samsung, LG, Telson, Pantech, Sanyo and Kyocera have all been reasonably successful in the handset space. The smaller players in GSM were forced out of the industry long ago. Slacker