Seeking Alpha

Robert Syputa's  Instablog

Robert Syputa
Send Message
Co-Founder of Maravedis BSEE, MBA Author and contributor to over twenty research papers on 4G and device IPR, industry market trends and financial developments. Speaker and presenter at standards and industry trade events. Focus on trends in technology before they emerge into mainstream thought... More
My blog:
View Robert Syputa's Instablogs on:
  • Qualcomm Still Riding Strong But Signs Of Ripples In The Waters Ahead
    Qualcomm still riding strong but signs of ripples in the waters ahead

    Qualcomm is confronting long term issues as mentioned in recent articles. These include the initial explosive growth of SmartPhones has started to taper off as developed markets have reached a saturation point and leading competitors are almost equal in features and an end to the 'wow factor' of new innovations. More innovation is derived from new software features, camera resolution, etc. There remain many new frontiers to conquer but these tend to be less 'wow factor' than incremental improvements, such as achieving lower power to enable longer operating life.

    An additional problem is the rise of the lower cost SmartPhones with capabilities that are now only about a year to 18 months behind those of the bleeding edge premium devices. The market for clones of popular devices is particularly robust in China, India and other populous regions that comprise about 2/3 of the total world population and the majority of new markets. Chief among the chips suppliers is MediaTek which is expected to soon raise their guidance for sales in 2013:

    see article: MediaTek likely to raise shipment target for 2013

    "MediaTek previously set a shipment target of about 200 million smartphone solutions for 2013, compared to the about 110 million units shipped last year." The new guidance is expected to be 10%-25% higher. Mediatek is due out with an 8-core 3G MTK6589 with LTE support in the MTK6599 due out latter this year.

    One article chides Mediatek as not having LTE until several month after Qualcomm and other suppliers. However, MediaTek's primary markets are the populous regions where demand for sub $250 SmartPhones is highest. Their entry will coincide with the major roll outs of TD-LTE in China, Russia, India, Indonesia and probably here in the US once Sprint-Softbank-Clearwire-DISH get something settled out.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Apr 25 1:06 PM | Link | Comment!
  • Sprint -Softbank Make Position Clear: Go Ahead With Merger, Weigh DISH With Prejudice

    Sprint and Softbank, responding to a request by DISH Networks to the FCC yesterday, April 18, 2013, to place the Softbank-Sprint merger agreement in abeyance (delay proceedings), issued a joint letter to the FCC asking for the review process, now scheduled to reach conclusion on or around July 1st, 2013, to continue on schedule, saying that "The Commission must not be distracted by Dish's latest maneuverings," Sprint said in a document addressed to the FCC.

    Sprint said that the continued proceeding with the FCC review would "...in no way limit Dish's ability to make competing bids for Sprint, nor does it prejudice in any way Dish's ability to challenge SoftBank's valuation of Sprint."

    Our Interpretation in Light of the Course of Developments:

    As mentioned in previously posted articles, their are several factors which lead us to believe that the Sprint BOD and management would discount the value of DISH's offer. To summaries, these are:

    • DISH's proposal has increased risk due to heavy reliance on unproven market developments for triple-quadruple play voice, broadband, video on demand, and TV multicast services.
    • The accumulated debt and future exposure due to new market risks is higher than is the case with Softbank-Sprint.
    • Synergistic benefits may be overstated and, in any case, are speculative
    • Time to consider the proposal comes late in the FCC-DOJ review process and is unsolicited and can be considered unwelcome (even though not characterized as such by Sprint).

    While the letter asks to continue the process while saying that this does not distract Sprint's BOD from considering the DISH proposal, the indication is in line with expectations that Sprint views the DISH offer as more speculative and conditional than Softbank's.

    We have expected objections, offers for spectrum, collaboration, or M&A because the Softbank-Sprint merger threatens the competitive status quo. From a strategic time-line perspective, Sprint-Softbank are primarily correct in asserting that the process should continue. While not put forward, the parties seem to infer, as we think is the case, that DISH's effort is at least partly to derail and delay a chief competitor from moving ahead with what is likely to look like, once detailed plans are announced, as a significant new competitive threat.

    DISH's alternative strategy objective may well be to try to force an agreement between their company and the Softbank-Sprint 'Starburst II' entity that will become New Sprint post merger. We think that much of the risks of debt leverage over extension, need for rapid uptake of technology, and push into new markets might be reduced to significant benefit if difficulties of M&A or collaboration agreements are overcome.

    It looks increasingly doubtful DISH will succeed in acquiring Sprint. This letter to the FCC is not blocking but sends a clear message of where the combined Softbank, Sprint and Clearwire think the process is taking them.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: DISH, S, S, Verizon, FCC, DOJ, 4G, 4G-LTE, TD-LTE, M A, Bonds
    Apr 20 7:05 AM | Link | Comment!
  • DISH Presents Case For Sprint Acquisitiojn

    Information on DISH's bid for Sprint is available on their investor section website as dish.com.

    DISH touts
    Cost Synergies $11 bn NPV
    Revenue Growth $24 bn NPV
    Capex Savings $2 bn NPV
    $37 bn NPV advantage

    This is compared to a listed question mark in the Softbank column

    This is being "very Ergen".. it suggests a very large market conversion to the new combined 'TV everywhere' plus mobile service.... which is far from certain. Still, DISH has the vision right... it has an appeal that has worked out in microcosm for DISH and for operators, including Softbank, in other markets.

    However, DISH dismisses cost and development and skill-set synergies most analysts recognize in Softbank. The argument that this is domestic has to be considered. However, that becomes a stretch because this would not be the combining of similar markets as happens when mobile operators consolidate operations... subscribers seldom have multiple mobile accounts but do have multiple mobile plus wireless and might expect some cost savings in addition to new sizzle of the sexy products and services. In fact, price almost certainly must be part of the 'value proposition' in order to gain large numbers of new subs. It can't be 'same price for partial/Swiss Cheesy coverage on limited devices'. The new service has a good deal of potential but faces tough competition in a saturated market for any combo of S, SB, and DISH.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Apr 15 4:53 PM | Link | Comment!
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.