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 (11451)	6/12/1998 3:44:00 PM
From: w molloy	Read Replies (1) \| Respond to of 152472

>> Exactly who is complaining about Qualcomm's high royalties? Gregg, I've got to support Tero on this. Those companies do exist. (names? - NDA <g> ) On another issue, LSI Logic and VLSI Technology will be offering alternatives sources to QCOM chipsets shortly. I'm sure at there are other companies working in the wings. To compete, LSI et al will need some tricks up there sleeves. LSI, VLSI et al obviously think they can offer something QCOM doesn't. Any comments (other than competition is a good thing...)? Regards w.

To: Gregg Powers who wrote (11451)	6/13/1998 9:12:00 AM
From: tero kuittinen	Read Replies (3) \| Respond to of 152472

Gregg, don't pop an artery. The argument about "sixty licensees" has nothing to do with the fact that most leading mobile phone manufacturers are favoring GSM, because making GSM phones doesn't leave them feeling like they've been attacked by a vampire bat. Motorola is intensely developing its GSM come-back strategy by introducing new phones at a hectic pace. Nokia is unrolling six new models. And where are the CDMA efforts of the number one and number two mobile phone companies in the world? They got what they paid for; Motorola nothing, Nokia a lackluster phone based on aging technology. I didn't expect Nokia to be so dismissive a year ago, but nobody else did, either. I suppose I don't have to remind you that number three handset company isn't making CDMA phones at all. That's three companies controlling 60% of global market share placing their heaviest bets on GSM. Number 4 is Philips for GSM, at number 5 are Siemens and Sony. That's 5/6 for GSM and I can argue that even Sony is more aggressive in its GSM efforts, which would mean that all meaningful international handset companies are investing more heavily in GSM than in CDMA. Do I really need to spell out what it means when an overwhelming majority of current R&D expenditures, established market share and brand name power favour one standard over another? Qualcomm's attitude is driving the phone makers into GSM in droves. Yes, companies like Sony and Philips are making or about to make CDMA phones... but don't you see what a huge difference there is between making a phone just to cover all bets and pouring all you've got into GSM phones, because it's a global standard? Have you any idea how innovative, daring, heavily advertized and expensive-to-develop the latest Sony, Philips and Siemens GSM models are? What good are the fabled sixty licensees for CDMA in the long term, if best engineering and marketing are poured into GSM and TDMA? I think the quality gap between Nokia's CDMA and GSM product lines predicts the answer to that question. In this context it's worse than useless to compare Nokia's CDMA phones to Qualcomm's CDMA phones. Aren't the consumers in USA now facing the choice between Qualcomm's CDMA phones, Nokia's 6100 phones and Ericsson's runaway hit, 788? Don't CDMA phones have to compete head-to-head with GSM phones in China if they ever want to break over 5% market share? Isn't Nokia's under 100-gram voice-dialing PDC phone the benchmark in Japan? I'm talking about the big picture here, not whether Qualcomm had a good second quarter in the US market. And I'm arguing that with a little softer approach Qualcomm would have been able to get many phone makers squarely on its side. The thing about cross-licensing is that you don't have to give a big chunk of your profits to any one competitor. Isn't it obvious why companies could see that as a better option than embracing a standard effectively controlled by one company with a Napoleon complex? Just how much effort is Motorola going to put into its CDMA phones when it knows that it will only get older chips from Qualcomm; that it will always be buying from a direct competitor that can anytime boost prices or withhold the latest technology? And looking at Apple, Intel and Microsoft it's obvious that a company in control of a standard will always stick it to the competitors, sooner or later. It's no wonder there's a widespread reluctance among handset makers to divert any funds from GSM R&D into IS-95. The Koreans were washed-out wanna-be's of the mobile telecom industry, so they had no choice when their government mandated them to go with Qualcomm's technology. Every real player in this industry is betting its future on GSM and W-CDMA. After the initial growth CDMA is experiencing subsides, it will have to face some real competition. I guess there's no sense to argue about this if you refuse to compare models from different standards. But that won't stop the consumers from doing so. Tero