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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: BDAZZ who wrote (50848)	3/8/2006 10:49:36 AM
From: engineer	Respond to of 197013

So how is Mr. amazing Jorma, sans siblings (god help us all), going to explain to shareholders why he P{**ssed away $100M over 10 years on a go nowhere venture and finally did what we all had said was the correct thing all along, which is to just buy chips and then IF he has a market and presence, make them. I think the JV is more a wake up call to Nokia that they can't do all things poorly and they have to focus on doing something well. They have Qualcomm coming at them head on in their fallback technology and they are getting their lunch eaten. They need to redirect everyone into fighting for their homeland. If this EU witch hunt fails, then they stand to allow QCOM to gain 15-20% of the GSM evolved WCDMA market and take the "high magin" CDMA business away from them. Reality is that they have been poorly managed, at the least over here in the US.

To: BDAZZ who wrote (50848)	3/8/2006 6:28:24 PM
From: GPS Info	Read Replies (1) \| Respond to of 197013

Q: Why is it they think it is a good idea now? A: Because they live in Spin City, Finland. I made comments on the un-moderated board regarding this about-face by Nokia. My unstated original context for those comments was the ‘roar’ created in the various media when Nokia decided to go head-to-head against Qualcomm, compared to the ‘whimper’ generated by their retreat. My continuing thesis is ‘does hubris help or hurt’ a company during the development process. If Nokia were smart, they would have never spent a penny on engineering in CDMA, but instead simply spin the advantages of EV-DV over many years, tell the investing public their relationship with TI gives them an out from Qualcomm royalties, and vehemently denigrate Qualcomm’s IP with respect to both CDMA and WCDMA. They never would have had to prove any of it, and they could have accomplished this same result with far fewer Euros spent. Go figure. The term ‘return on investment’ creates such a beautiful acronym, ROI. ROI is king, both literally by way of the French language, and metaphorically, as a critical metric for any investor. All investments should start and end with an understanding ROI: one’s initial expectations compared to one’s result at the end. My narrow concern here is how hubris, or more generally, how a company’s conduct aids or hinders their undertakings. At any time really, but especially when making forays into uncharted waters, a company must start with an expectation of a positive ROI. General competence, available resources in men and materiel, and the complexity of the task all factor into the final RIO. As a very general rule, the competent generate a higher RIO than the incompetent. A state lottery is a clear exception to the rule. Likewise, the greater the complexity of a task, the lower eventual RIO because of the total amount of expended resources, all else being equal. The commitment of resources gauges the determination of a company as well as its reserves set aside for research. This is a crude outline of the many factors involved in the success or failure of some business effort. Hubris enters the picture when a company’s prior successes delude them in to thinking that a problem is less complex that it actually is. This may manifest itself by suggesting that other existing players in the field are less competent than themselves, so therefore the complexity of the problem should be easily managed. After the first few setbacks, the company now called Hubris Corp. decides that the time and money spent has reduced the eventual ROI. Hubris decided to spread the cost of development to other partners with a promise of vast the riches now enjoyed by only a few. After more setbacks, the partners complain about the distribution of expenses for this research, and ask “how do we catch up faster to the competition with the remaining resources?” Hubris explains that they don’t have the competence to move any faster, and so they will try to slow down the adoption of the competition’s technology. This is the last and best hope for Hubris. However, once they realize that they are not closing the gap, Hubris plans its exit strategy: they explain to investors that “the market is too small to worry about” and “they have other targets with much better RIO.” Please believe us, this is actually a ‘shareholder-friendly decision’, and not an admission of Hubris’ incompetence, nor is it a lack of their partner’s commitment to continue to expend their resources on a project that has gone irredeemably south on them. A facile comment about how the RIO wasn’t what they had expected ignores a FUBARed approached by an arrogant company hoisted in its own gastrointestinal petard. I fully expect that companies will expend financial and human resources to explore uncharted business opportunities - and fail in some of these areas. Not to test the waters is foolish when a company can afford to do so. Their ‘next big thing’ will probably come from these efforts. Arrogant companies take on projects and then denigrate others in the field, and underestimate the complexity of problems, and tie their reputations to projects beyond their talents. Peace be to Nokia in their senescence.