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 - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (1011)	7/17/2004 12:45:46 PM
From: tinkershaw	Read Replies (1) \| Respond to of 2955

Hey Apollo, If I remember correctly OVTI split not more than 6 months ago. Not always a great harbinger of things to come. But I lean more towards you Apollo on the extent of QCOM's dominance, however, Mike has a good point as much of this dominance will not likely come from architectural control. Still, I think, like Intel, QCOM will be able to build from its core position to dominate more of the product down the road. Just thinking of new wireless applications, one suggested by the conference from Nextel that you linked to with live conversation and video from the pits during a NASCAR race. Talk about new, new, new media. This is not easy to implement stuff, and requires far more than just the ability to produce basic chips that can do CDMA, it requires some real knowledge and focus. I have yet to see a single company other than QCOM with the focus, speed, and skill to be able to produce chips that can so function. As long as 3G and its applications remain in a tornadic fashion, I think QCOM is going to find itself in an extremely enviable competitive position. Only after the tornado dies away might some weaknesses from the W-CDMA world likely to rear their head. Other functions such as point to multi-point transmissions, and who knows what else are going to create applications and functions so revolutionary as what we are looking at is not just some cool new cellular phones but an entirely new, new, media, just as the Internet became the new media, with portable wireless devices, powered by 3G, which is dominating and I think will continue to dominate just because of the pace of innovation, and QCOM's focus and dominance. Were it just incremental applications we were likely to see I'd be less optimistic and more concerned about certain Royalty aspects of the 3G marketplace, but because we are looking at new, new, media being created at a rapid pace, it leaves little time for competitors to actually learn how to produce these very difficult chips, much less keep up with the pace of innovation. Tinker

To: Apollo who wrote (1011)	7/17/2004 3:31:42 PM
From: Eric L	Read Replies (1) \| Respond to of 2955

Control of a Proprietary Open Architecture << .... what am I missing? >> The fact that the open architecture of the 3GSM UMTS WCDMA platform is not under the exclusive (proprietary open) control of Qualcomm, or any other company. The architecture of the 3GSM UMTS WCDMA platform evolved in committee (3GIG, ETSI, 3GPP) and like GSM (which continues to evolve in committee in parallel with 3GSM) is based on the contributions of many stakeholders, insuring that no company has gorilla control over the platform's architecture, or in this case even the architecture of the primary (UTRA DS) or secondary (UTRA TDD) access modes. "Architectures define the way in which various parts of a system hook into each other in order to make the whole thing work. ... Architectures can be controlled by a single company or a group. When they are under the exclusive control of a single company they are called proprietary. The opposite of a proprietary architecture is one that is controlled by a committee--a standards body or consortium." - GAM, The Gorilla Game, pages 52. 53 (RFM), pages 48, 49 (FM) - The differences in the continuously evolving competitive advantage that accrues to Qualcomm in the CDMA2000 domain of mobile wireless telephony where they have proprietary open control of the architecture and where they can proact in driving further development, is dramatically and visibly different than it is in the GSM and 3GSM UMTS domains where they have to react to continuously evolving committee based standards that govern the platforms architecture and its service containers. Best, - Eric -

To: Apollo who wrote (1011)	7/17/2004 4:10:06 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 2955

Apollo, What are you thinking, and what am I missing? The fact that QCOM will collect royalties on all forms of CDMA does not make it a Gorilla in all of them. Instead, it means that QCOM will collect royalties on some parts of CDMA for which it is a Gorilla and on the other parts for which it will be a royalty play, hopefully a very strong King. At least that's my interpretation. EDIT: Now that I've read Thomas's post, I'll also respond in the context of his message. In my mind, there are Gorillas and Kings of varying strength (control over the value chain). QCOM has an opportunity for the reasons Thomas mentioned in being one of the strongest Kings ever. However, that still doesn't make it a Gorilla in areas of committee-controlled architectures. This is an issue that Eric and I have always agreed upon from day #1. We're either both very right or both very wrong. --Mike Buckley