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

To: LarsA who wrote (129396)	5/29/2003 4:36:40 AM
From: mozek	Read Replies (1) \| Respond to of 152472

Lars, I think your scenario makes a lot of sense, but what these devices and services are and how they come together will take some evolving. Personally, while the idea of a standalone Bluetooth (or something with more fidelity) enabled CDMA/WCDMA/GSM tranceiver is certainly possible, I think it's more likely that these functions will be integrated into some common mobile core that can be surrounded by peripherals. After using a Bluetooth headset for some time, I also think that we don't have a PAN wireless link with the quality that will be needed to make that vision a reality. One scenario that I believe could make sense stars an evolved smartphone or PDA that provides the most required features (voice, messaging, access to the most popular services/software) and support for an ecosystem of PAN peripherals. In this case, the device or handset that has the core networking functions would likely be a fairly expensive device in the mix, comparable to at least today's mid-range/high-end smartphones. As far as WiFi, I believe it will make a lot of sense in some environments, especially private, wireless PC and PDA networks. With the right kind of roaming agreements and billing systems, it could even make economic sense as a pay-for service in some areas. For PCs, WiFi definitely makes sense and is appreciated wherever you can get it. The problem I see with WiFi is that as much as many in the PC industry would like PC penetration to be ubiquitous, mobile voice and messaging has much greater penetration, and it is enabled with much more ubiquitous cell phones. Of course, that reality doesn't benefit all technology/service companies equally. As a result, WiFi is the natural choice to promote for PC-centric companies, companies that would like to sell WiFi equipment, or network service companies hoping to gain customers without any spectrum license. Will WiFi eat into CDMA revenues? For PC data services, very likely. For high-bandwidth services that might include streaming video of entertainment quality, it also seems like current 3G may come up short, but to enable a next generation of always connected, data-enabled applications (market yet to be proven), I think ubiquitous connectivity will win out. To me, that means 3G can still unfold largely as expected, but we're missing the driving apps/services as well as a good selection of enabling devices. Now to Qualcomm... I believe there is certainly a likely scenario where Qualcomm succeeds wildly in the new, wirelessly connected world. At the same time, new risks seems to be taking shape in the form of 1) 3G postponement due to lack of killer apps/services and WiFi confusion/sidetracking, 2) potential alternatives such as 802.16 that may get enough time to come to fruition if things get postponed long enough and 3) lack of driving apps/services and no GREAT platform for innovation of said apps/services (IMO, BREW included). Given all that, I still think it's likely that Qualcomm will do very well over the next three years, assuming that a few/couple service providers and device manufacturers get their act together and create/capitalize on some of the opportunities that I believe exist today in 3G. Thanks, Mike

To: LarsA who wrote (129396)	5/29/2003 8:35:50 AM
From: Jim Mullens	Read Replies (2) \| Respond to of 152472

Lars, good points and some of the reasons why subscriber/ device penetration rates can go much higher. Re: “So then the question again: what part of all this this would give revenues QCOM? The way I see it it's not an IPR issue but maybe it's covered by the license anyway - e.g we want 5% or a minimum of $20 per tranceiver, which ever is higher.”<<< I believe Dr. J replied to that issue during the Q&A at the Spring conf. regarding the royalty rates on a laptop with CDMA capabilities. He stated a royalty would apply but not at the full price of the device as they had a maximum amount provision but did not go into the specifics. I’m guessing that It could be in the $400- $500 range ($20 to $25 royalty to Qualcomm). They also stated that the newer Qualcomm chips would support camera/video phones/appliances with 3-4 mega pixel resolution (the audience appeared amazed).

To: LarsA who wrote (129396)	5/29/2003 8:42:07 AM
From: slacker711	Read Replies (1) \| Respond to of 152472

Maybe a good cordless headset connected to a small clever device (fountain pen size, battery capacity permitting) in a shirt pocket could do it. Minimal display, minimal tactile input, sort of the basic stuff you have to bring when you walk the dog. All the the different data applications however: streaming sound /video, location services with maps and GPS, radio & TV tuner, games, cameras, rich email -they all need a good display, hi-fi sound system, keyboard, processor capacity and a lot of specific memory, I would prefer to have that in a small PDA-or Nokia Communicator-like device - or maybe more than one. You bring it out when you sit at a table, or in an airport or on a train. If your scenario did become reality, I think it is safe to say that Qualcomm would lose quite a bit in royalties. However, I must say that I think it is unlikely that will be the route of future handset/PDA development. - I dont think that most people are looking to carry multiple devices around. If they were, I think stand-alone PDA's would continue to rule instead of giving way to combo units (which is generally occuring). - Perhaps an even greater drawback is that many men/women wouldnt be placing the transmitter into a shirt pocket....but rather a pants pocket. Now, I am generally not paranoid about the effects of wireless communication but it would certainly give me pause to place a transmitting device in a pants pocket. Remember, we arent just talking about IS-95 or GSM, but also about WiFi, bluetooth, W-CDMA, and 1xEV-DO. If you are sitting in a relatively empty CDMA cell and using DO, you are going to have your device transmitting on full power for a significant percentage of the time (which rarely occurs in a cellular situation). If nothing else, most of these wireless devices tend to produce quite a bit of heat....that probably wouldnt make for the most comfortable session of web surfing. Now the science may say that this is all safe, but on an instintice level, but I think guys would be pretty squeamish about having a warm transmitting device down there. OTOH...it might be popular in some parts of the world, it could keep you warm on a cold winter night ;-). Slacker