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

To: tinkershaw who wrote (484)	12/9/2003 10:50:32 AM
From: Don Mosher	Read Replies (1) \| Respond to of 2955

Tinker, I don't believe I adequately specified SCON's unique competitive advantage. Handsets are limited to 2 dBs in power as part of their standardization. Increasing their power could propagate their signals farther, but it also increases the interference floor in the system. However, the cryogenic front-end superfilter and low noise amplifier increases the selection and sensitivity of the reception of the handset's signals. This improves the quality of the uplink channel from the handsets by using a reliable, small footprint, and easily installed and maintained, but relatively inexpensive addition to the base station. As data become increasingly common, the solution becomes increasingly necessary because data requires a high quality channel. For instance, high speed data solutions often use a selection diversity algorithm, which selects the handset with ideal receptions characteristics, usually close to the tower, for receipts of a full power high speed transmission (this approach is usually coupled with a fairness algorithm). This will become increasingly important in guaranteeing QOS. The addressable market, according to their last conference call, is about 30% of existing and new base stations. Thus, the cryogenic front-end receiver solution increases the size of the sweet-spot for data transmission. The same dynamic of simultaneously improved sensitivity and signal selection reduces blocked or dropped calls. Of course, the underlying scientific principle is that superconductors reduce or eliminate the resistance to the flow of electric current or selected electronic signals. This is a unique and valuable technology now becoming available in RF frequencies because of the discovery of high temperature semiconductor materials in 1986 in the RF range. Of course, because you own QCOM, you understand the implications of the build out of 3G networks. Of particular interest is the power of QCOM's modular solution that multiplies and decentralizes the value chain's complementary contributions. For instance, cameras or video recorders, TV tuners, LCD and OLED color displays, increasing external memories, and the like are profiting from Moore's law. With QCOM offering the lowest-cost-per-bit solutions, the ARPU's of carrier will be driven ever higher by the ever increasing, but ever cheaper, demands for data. SCON is another enabling complement that possesses a unique and proprietary architecture that is portable across all RF modulations and can be extended ever deeper into the front end. Thus, it is a cryogenic architectural module and a potential locus of high value. SCON has acquired patents on two of the three high temp substrates and productized RF production. It promises, at a minimum, a significant time-to-market advantage, and may, at best, prove over the next few years to be an emergent gorilla or, at least, to have several valuable degrees of architectural control. Depending on your risk level and if your are not a gorilla "fundamentalist," who waits for an unmistakeable tornado, you may find it to be an interesting speculative investment now or later on. Pointing this out to you is my way of thanking you for pointing me to RMBS, although I was not bright enough to get out when the DRAM market turned down. Still, I have confidence in that company too. Best, Don