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

To: tero kuittinen who wrote (13243)	8/3/1998 12:13:00 PM
From: Gregg Powers	Read Replies (4) \| Respond to of 152472

Tero: Very liberal vendor financing has played a pretty important role in GSM's success in China (and TDMA's success in Brazil). Unless you have specifically evaluated the deal structures, and concomitant politics, I would caution you against drawing broad brush conclusions about the power of standardization. I simply do not understand your comment about the U.S. market. Both Sprint and PrimeCo (two of the three border-to-border PCS carriers) are doing very well. And, mind you, not only from a subscriber growth standpoint, but from a cash cost per subscriber perspective (ATT Wireless certainly cannot make the latter claim). Virtually all of the 800mhz carriers are now deploying digital and are, almost universally, accelerating their migration to the same. Whose "expectations" have been disappointed? Are you citing a credible expert or just voicing a "gut feeling"? As for Japan, there was a recent market survey that showed something like eight out of ten Japanese tested favored CDMA voice quality to their existing cell-phone. You seem not to understand that the voice quality of Japan's existing TDMA system is pretty rancid and NTT-DoCoMo qualitatively won't have anything to compete with DDI/IDO. Moreover, if...as I have suggested...DoCoMo deploys W-CDMA (in two-to-three years), its vendor will be on the hook for royalties to Qualcomm...so how does QC lose in this battle? Tero...you argue that some specific marketshare percentage is required to be successful as a handset vendor. First, I would love to see your concise economic justification..not words..but numbers like supply chain, component costs, manufacturing overhead, R&D allocation etc. that support this metric. Second, how do you adjust this metric for QC's royalty and ASIC position. Since all CDMA handset competitors have to pay QC a royalty, Qualcomm has an embedded margin advantage that MUST influence the economics you describe. Please recalculate and present some quantitative justification for your opinion :-) .. Yes..the cellular market is a honey pot..and I would describe Qualcomm as the "honey badger" of the wireless industry. Best regards, Gregg