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To: Gregg Powers who wrote (13241)	8/3/1998 11:54:00 AM
From: tero kuittinen	Read Replies (1) \| Respond to of 152472

Don't diss untoward hyperbole... that's my forte. It's not the same as lack of substance. China has perhaps 100 - 200 million people who can currently afford a mobile phone. GSM has achieved such a market penetration in that group that it already is a de facto standard. I think people in this thread tend to ignore the power of standardization... this is a phenomenon that has been driving the IT revolution and I don't expect to see it suddenly losing its significance at this point. CDMA is nowhere near as strong in USA as it was widely expected to be two years ago. Japan is starting the implementation of Nokia/Ericsson-designed W-CDMA in 2000... so I'm not shedding any tears over lack of Japanese GSM; NTT-Docomo and the Japanese government is determined to make the GSM successor standard big in Japan. Meanwhile, those CDMA handsets in Japan have to weigh under 100 grams to make an impact in the consumer market and the dominant cellular operator is going to fight CDMA every inch of the way. There are nine (9) major Japanese handset manufacturers making PCD phones, some under 80 grams and most packed with features like voice-dialing (as in Nokia's brand new PCD model). That's one evil posse to pick a fight with. The economies of scale will ultimately force all but one or two handset manufacturers to become low-margin commodity businesses. There is no room for profitable low-scale manufacturing. The second quarter results from Alcatel, Siemens, Lucent/Philips, Sony, etc. showed that the second-tier handset companies are in a world of trouble. You need at least 15% global market share to combat the big three and I don't really see Qualcomm getting there. There are plenty of examples of how even a small handset division can seriously dent the profit growth of the mother corporation. The lucrative global mobile phone market is a honey trap, luring companies into manufacturing and then leaving them with big write-offs when they can't hack it on global scale. We saw this exact phenomenon in PC business; we are about to be treated with a rerun. warmest regards, Tero