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

To: edwin k. who wrote (22552)	2/5/1999 3:29:00 PM
From: bdog	Respond to of 152472

By George I think you've got it!

To: edwin k. who wrote (22552)	2/5/1999 3:41:00 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 152472

GSM providers trying to stay in business Edwin, you summarized it all perfectly, though a couple more paragraphs would have made it easier to read. What you are missing is what on earth Ericy as the only major unlicensed company is supposed to do now that they are right in it up to their necks. You also missed what the Koreans, NTT, Motorola, Nokia and all the others can do to reduce the money they have to give Qualcomm. Tero wants things all lovey dovey. Business doesn't really work like that. Sometimes it is co-operative where interests meld, such as WirelessKnowledge with Qualcomm and Microsoft, but mostly it is competitive, like mating, and there are winners and losers and extinct lines of DNA. At present, it seems that Eudora is being defeated by Microsoft. So we can co-operate while competing in other areas. GSM is heading for the scrap heap. Ericy and all the other telecom companies would like Qualcomm's royalties reduced. Ericy has the added disadvantage of no cdmaOne licence so they are in desperation straitsville. Qualcomm will only sell them a cdmaOne licence for a huge fee. Ericy probably whines like a 747 that others got it cheaper, such as the Koreans. Q! will tell them that the Koreans chanced their arm at time when Ericy was sneering that Q! was going to fail and the Koreans and any other IS95 dreamers would go broke, so Ericy is not carrying any risk by buying a cdmaOne licence now that things are all hunky dory. So how about Ericy pay the same licence fee as a brand new entrant to GSM would have to pay if they had no IPR to exchange? So Ericy whines like a 747 and doesn't know what to do. Even if they buy a licence, they haven't the brainpower to make it work. Making it work is no mean feat, as Motorola found and they had been in on cdmaOne since about 1990. As had Nokia and they are having handset trouble, having to buy the necessary ASICs from Q! Meanwhile cdmaOne is growing by leaps and bounds and now Ericy has Vodafone on their back! And NTT. But all would like to nail Q! and get the royalty down to say 1% or less. But we Q! shareholders know we are sitting in the box seat, with USA political, legislative and military power backing us. The USA does not like being robbed! It is Q! with the knowhow, versus all the rest, but with USA government backing. There is NO lovey dovey let's make friends. There is inherently conflict of interests. The Korean, European, Japanese and Chinese governments, as the main power brokers will try to use state power to get concessions from Q! and the USA. The USA will face down the whole lot because to give away rules on IPR and to allow trade restrictions is to cause a stupendous international disaster which would make the world look more like Rwanda than Switzerland. The whole lot know that to be true and have IPR of their own to protect. So they will cave in. NTT is under big pressure right now. So is Vodafone. They want action, and NOW!! Ericy wants to use the courts to delay cdmaOne and WWEb although both will not slow down at all and their litigious approach if successful in causing a big delay is NOT going to make NTT and Vodafone happy! The 10% WWEb royalties which Q! should require [really it should be 17% but in the interests of love, peace and harmony and the tradition of tithing, 10% is a nice round number] is small in the overall context of the cost and value of the technology. Vodafone and NTT will realize this and demand action on a single standard so they can get on with competing. 10% is about the cost of a full package R&D anyway, so that's as cheap as it gets. They can just pass the cost on to subscribers who won't be worried about that 10%. Ericy, Nokia and others could hope for an OJ jury in a patent dispute, or a judge who can't differentiate between a concatenated convoluted logic with erlangs on the side and an orthogonal two stick Walsh function with quarkian attenuation. But they are running out of the patience needed by Vodafone and NTT to play that game. In any case, it is a stretch. They can also hope for political power and irrational action to play a part. The trouble is, politicians aren't totally irrational when it comes to their own interests and they won't find the situation is swimmingly fun for them - they will want it all to just go away. The EU won't want a banana war on their hands of THIS nature. Bananas are fun, but this could be ugly! They check their options and find a 10% tithe is fine, their markets should be open anyway because Vodafone, Alcatel, Philips, NTT, Siemens want it that way. They've seen the Tomahawk missiles and those make a BIG mess! Right in your living room That's why the noise and drama! Ericy is right in the middle of a huge, rotting, GSM carcass, with Tero flogging it, trying to keep it moving. Right in the middle of a carcass is where hagfish love to be. They make a living there, but they never see the bright lights of New York! [How a dead horse comes to be at the bottom of the ocean beats me, but it's needed for the story!] That's the way it looks from here... Mqurice

To: edwin k. who wrote (22552)	2/5/1999 4:47:00 PM
From: bananawind	Read Replies (2) \| Respond to of 152472

Edwin, You basically got to the right conclusion, but missed a bit on detail. GSM (and its little sister TDMA) are not analog. Like cdmaOne they are digital. But they are an older technology that is only 1/3 to 1/4 as efficient in using available spectrum vs. cdmaOne. For 3G wideband the Europeans want to change to a CDMA air interface while keeping their GSM ground network. Fair enough. Problem is they need QCOM's IPR to do this and Q has said they will only license the IPR if the new air interface standard is also compatible with existing cdmaOne infrastructure. That would be easy enough for the Euro's to do but would result in a competitive advantage for existing cdmaOne operators who would have to make much smaller, less costly changes to their systems to accomplish this. Thus the Euro's (and US GSM operators) have been reluctant. Actually it is really the GSM equipment manufacturers who are reluctant and have the most to lose - namely Ericsson. As soon as they admit that a backward compatible (to cdmaOne) 3G air interface will be coming in 2001-02, their sales of GSM equipment would nosedive, particularly 3G equipment. Hope this helps. Jim