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.

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

To: Gregg Powers who wrote (11440)	6/12/1998 1:12:00 PM
From: tero kuittinen	Read Replies (3) \| Respond to of 152472

Gregg, I concede that I haven't seen any calculations on the GSM IPR burden for a new entrant. Whatever it is, I haven't seen complaints about the GSM IPR burden and the number of cell phone manufacturers indicates that nobody's fazed. On the other hand, large number of companies are complaining about Qualcomm's approach to demanding high IPR payments. And there is no doubt that the CDMA phone manufacturing has been off to a slower start than anybody could have predicted. I think it's different for a large group of companies to ask for very low IPR fees than for one company to ask for high sums. The latter is much less palatable. And mentioning "5%" in the W-CDMA context can't be deemed reasonable by any observer. I mean, the standard is developed by Nokia and Ericsson. Should they then get each a 10% cut? Who would manufacture any W-CDMA products with 25% of gross going to other companies right out of the gate? Or should Nokia and Ericsson get also 5%, even though they have done most of the actual work in designing the W-CDMA? Asian situation is much less grave to a truly global company like Nokia than it is for Qualcomm. China's economy is still growing at 7% annual rate while Korea's is contracting by 4%... I definitely see a difference here between the biggest Asian GSM market and the biggest Asian CDMA market. NTT-Docomo, the world's biggest mobile operator has already committed to W-CDMA... while CDMA's future lies on the sloping shoulders of DDI... I see a difference here as well. The robust European sales are an important profit haven for Nokia. But American companies like Qualcomm are under siege by Korean and Japanese price competition fueled by steep devaluations and the Nordic companies, both of which boosted their US handset market share by over 10 percentage points in 1997. Before introducing their hot new models. As far as Qualcomm's current phones are concerned... mene, mene, tekel ubarsin. The writing is on the wall. QCP-1900 and QCP-800: both weigh over 250 grams and have stand-by times of up to 50 hours. QCP-820 and QCP-2700: 184 grams and stand-by of up to 65 hours. That's four mainstream models, all with completely obsolete technology. Is Qualcomm ready to ditch them by next fall? I hope so... if the company has any inventory on these dodos it will have to sell them as doorstops. BTW, Nokia's cheapest, sleaziest, lowest model among its six new products is 5110: weight 170 grams and stand-by time of up to 270 hours. And the high end? Q-phone weighs 162 grams and has stand-by of up to 30 hours. I mean, it can hardly compete with Nokia's low-end model, the one that is pitched to schoolchildren and grandmothers! Nokia's high-end model weighs 98 grams, yet still has a stand-by time of up to 120 hours. (In all examples highest stand-by times are achieved by heavier batteries than used in weight measurements, so the results between Qualcomm and Nokia are directly comparable.) Check out the difference in display technology and weep with helpless rage. Yes, we had this argument a year ago. No, there was no agreement then either. But a year ago everyone claimed that soon Qualcomm would start to catch up with the GSM giants. Well, it hasn't happened. The quality gap is actually wider now than twelve moths ago. Everyone said that no-one cares about stand-by times... but if Nokia's stand-by times are 400% higher than in comparable Qualcomm handsets, might that not give pause to some buyers? The gap stays the same even if you are looking at "slim" battery numbers. When you add Qualcomm's chronic weight problem, grainy displays, lack of brand strength and slowness in introducing wireless links we are talking about real trouble. Tero