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

To: Q8tfreebe who wrote (59678)	2/2/2007 10:23:07 PM
From: Maurice Winn	Respond to of 197253

Q8, I don't buy the argument that handsets were a commodity. Nokia seems to have done okay in the "commodity" handset market and Sony-Ericsson is doing very nicely too. How come Sony-QUALCOMM didn't do well? Yes, I know about the economies of scale for components, but that seems like a weak argument given the success of a LOT of small handset makers. Remember QUALCOMM was first into the CDMA handset market. QUALCOMM was up and running with the first PDA style device which became the highly successful Kyocera 7135, and could have become the must-have Anita [TM] - easily beating Research In Motion. Even if Nokia with huge economies of scale could buy components somewhat cheaper per unit than QUALCOMM, subscribers will happily pay a lot for an excellent design. Which is why Nokia was so successful. Nokia's success wasn't built on having very cheap parts. Their advertisements didn't say "Really cheap components, get a cheap phone here!" They promoted their "Human Technology" designed with great ideas. QUALCOMM was first into the CDMA handset market with Sony and rescued Motorola in Hong Kong when Motorola couldn't come up with the goods. QUALCOMM also had a simply fantastic opportunity in Globalstar and is now the sole provider of Globalstar handsets with the new QCP1700. Ericsson and Telit gave up. QUALCOMM still has a fantastic opportunity with Globalstar handsets. This part of the argument is weak and more of an excuse for poor performance: <...the handset division created a conflict of interest vis a vis QCOM's more profitable chip division (i.e. handset vendors did no want to buy chips from a competitor...QCT). > There is competition everywhere in business. If handset vendors don't want to buy ASICs from a company which also makes handsets, that's up to them. If they prefer buying an inadequate more expensive ASIC, they should go for it. Or, an ASIC which better suits their idea of what they want to build into handsets. By buying less adequate ASICs they would be less likely to be successful in the handset market and lose to competitors who don't get all bitter and twisted that the ASIC supplier also has a handset business. That's no way to run a business. There are a LOT of handset licensees so if half of them paid more for less adequate ASICs, that would still leave plenty to buy QCOM ASICs. I bought a QCP820 and it was bung [the connectors or something]. They couldn't even get basic quality control done right. Having failed in the handset division, Paul didn't earn great credentials for taking over the whole company. BREW might be an excellent business, one of these days. At present, it's just a toy shop. I think it might be a good idea if Sanjay gets the nod for the top job [though I haven't got a well-considered opinion - just a thinly-based argument]. I dare say if Sanjay Jha went swooping around India, visiting Bangalore, funding an education institution for bright young 15 year olds who are interested in QUALCOMM-related subjects, and integrating QUALCOMM into India, it would do a lot to open up a billion people to QUALCOMM being the best company in the world. I doubt that Paul is the right guy for that job. China might look over the fence and want to join in the mobile cyberspace revolution too. They might stop seeing QUALCOMM as simply a USA company, and realize it's a world-based company, located in San Diego, and start competing with India for a pre-eminent position in CDMA2000 EV-DORA, DORB, OFDM, rather than goofing around with TD-SCDMA and treating QCOM as a USA pariah. At present, I dare say both India and China see QUALCOMM as an olde-style mercantilist colonist outpost and so there is negativity which is not justified. Enough QUALCOMM money has gone into San Diego, even if it was mostly through Irwin's personal money [the ingrates on the jury told the judge that QCOM was in the wrong - thanks folks]. Start piling $1bn into India! There is a LOT of people there who could benefit from and appreciate such a huge investment [and I don't mean corrupt officials who should be told to go to hell - go over their heads to the voting public]. Mqurice