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To: w molloy who wrote (11699)	6/23/1998 10:44:00 AM
From: Gregg Powers	Read Replies (2) \| Respond to of 152472

w molloy: I was less than clear in my point. 100% bit-level accuracy is necessary for the file data and is ACHIEVED through error detection and correction (which impose significant overhead). The best example is when you "dial-up" with your 33.6 modem and connect at some substantially lower rate; in most instances, the modem hardware/software has adjusted the baud rate downward to accommodate line noise. It is exactly this overhead burden that makes the "reality" of wireless multimedia--particularly given that it is an interference prone medium--less attractive than the theory. Technology will clearly improve and I am not saying that there is no market for wireless data. I am observing that many operators that I have spoken with (including Airtouch, BellAtlantic and BellMobility) stated positions similar to MobileOne's Montefiore...specifically that "wireless data & multimedia" will be an incremental business of increasing importance as time goes on--but the vast majority of consumer minutes will derive from mobile voice and therefore networks should be optimized for the latter rather than the former. Please understand that I am not burying my head in the sand and suggesting that wireless e-mail into my Pilot/laptop is not a good thing--rather, I simply agree that the mass market consumer consumption of wireless telephony will be driven by voice. To the point of cdmaOne versus W-CDMA, Irwin Jacobs would argue that cdmaOne will offer most, if not all, of the high data rate functionality of W-CDMA within two years, while W-CDMA is not scheduled to be commercially deployed until 2002. It seems silly to him/me that operators would prefer to wait three-to-four years for some "new" standard, with little or no functional advantage over existing systems. When you think about it that way, Ericsson's strategy becomes more obvious. Since CDMA has delivered on its capacity and voice quality promises, and subsequently begun eroding the competitive position of TDMA-based GSM, Ericsson needs to respond. If ERICY simply bought an IS-95 license, it would be announcing to its customers that TDMA-based GSM was dead, and that the future was IS-95. This, at a minimum, would have a chilling effect on GSM sales into new markets (although expansion of existing GSM systems would likely continue)--hardly an attractive outcome. Instead, Ericsson claims to be developing a 3G (i.e. next generation) form of CDMA that is custom-tailored to be backward compatible to existing GSM networks while excluding IS-95. This is an attempt to Balkanize IS-95 and buy protect Ericsson's installed base--the problem is, Ericsson cannot do W-CDMA without Qualcomm's IPR. I know that there is much debate over what Ericsson can and cannot do versus QC's IPR, so in the final analysis, investors must make a judgment--who is right and who is bluffing. I have known Irwin long enough to be absolutely and positively convinced that he believes--to his very soul--that QC's IPR position is impregnable. His resolute inflexibility reflects his conviction that QC earned this IPR position through a herculean investment of time, effort and intellectual and economic capital. I have tried to be as objective as possible in drawing the above conclusion, but the coroborrating evidence--harkening back to Ericsson's lawsuit file in September of 1996--is substantial. The good news is that most, if not all, of the operators that I speak with agree with the analysis--so it doesn't appear that Ericsson is fooling many people (beyond those in the financial community). Best regards, Gregg