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No. of Recommendations: 2
1. Is it a discontinuous innovation? Yes
2. Proprietary, open architecture? Yes
3. Forseeable value chain? Yes
4. High switching costs? Yes
5. Is the technology across the chasm? No

The book states that at first, there may seem to be no natural customers for an enabling technology, but that obviously isn't the case here.

If I get some time, I may attempt a full-blown Gorilla
report on this.

http://biz.yahoo.com/bw/000615/ca_technic.html
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No. of Recommendations: 1
1. Is it a discontinuous innovation? Yes
2. Proprietary, open architecture? Yes
3. Forseeable value chain? Yes
4. High switching costs? Yes
5. Is the technology across the chasm? No


Disclosure: I do not own any QCOM and, as such, have not done any DD on it. However, I assume that there are CDMA handsets & networks in existence today. Am I right?

Crossing the chasm (according to Crossing the Chasm and Inside the Tornado) means capturing (at least) one niche market.

Just wanted to point out what I thought was an error here. If I am wrong, I deserve to be flamed -- so flame away.

Steve (already hot in Sacramento -- 108 today)

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However, I assume that there are CDMA
handsets & networks in existence today. Am I right?

Crossing the chasm (according to Crossing the Chasm and Inside the Tornado) means capturing (at least) one niche
market.


Steve,
I was refering to a SECOND enabling technology for QCOM which represents a discontinuous innovation in the film industry, totally apart from their CDMA Gorillaship. Sorry to be less than clear, hopefully I will have more details shortly.

Tim
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Cisco and Qwest demoed a similar type of system last week during SuperComm2000 in Atlanta. Apparently theres money in eliminating the actual physical films.
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However, I assume that there are CDMA
handsets & networks in existence today. Am I right?

Crossing the chasm (according to Crossing the Chasm and Inside the Tornado) means capturing (at least) one niche
market.

-------------------------------------------------

Steve,
I was refering to a SECOND enabling technology for QCOM which represents a discontinuous innovation in the film industry, totally apart from their CDMA Gorillaship. Sorry to be less than clear, hopefully I will have more details shortly.

Tim


Oooh! Slightly scorched. Maybe I need to slow down a bit when reading this board. Didn't catch the reference to the film industry.

I stand very much corrected.

Steve
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No. of Recommendations: 2
tjbd,

Is the technology across the chasm? No

There were nearly 60 millino CDMA subscribers at the end of March. Surely there are many more than that now. How many subscribers would there need to be for you to assess that product adoption has crossed the chasm?

--Mike Buckley

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tjbd,

Now that I understand you were describing the criteria involving digital cinema technology, I agree with your entire assessment.

--Mike Buckley
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Cisco and Qwest demoed a similar type of system last week during SuperComm2000 in Atlanta. Apparently theres money in eliminating the actual physical films.


Yes Cisco is moving fast in this game. And Qwest seems to be most interested in broadband content streaming, based on their humorous commercials ("Yes we have all movies ever made, available every day, all the time...")

Eventually the movie industry, the theatre industry, and the technology companies must decide on a standard protocol for pulling this off. I foresee hella-huge $ for the winning technology. But I don't nearly see Qualcomm as the favorite if fighting Qwest-Cisco for standard development.

Anybody here followed this closely enough to see a value chain developing behind one camp or the other? Are there reasons to believe Qualcomm's or Cisco-Qwest's solution is superior to the other?

DP
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Anybody here followed this closely enough to see a value chain developing behind one
camp or the other? Are there reasons to believe Qualcomm's or Cisco-Qwest's solution
is superior to the other?


Dan, so far, Kodak, Technicolor, Cinecomm, Texas Instruments (who have refrained from announcing any alliances as yet) and Hughes/JVC have either demoed or announced alliances with Qualcomm. Oh, and GEORGE LUCAS, and Hollywood is nothing if not follow-the-leader.

I plan to address this in my report. I'm still gathering info.

As for the Qwest-Cisco aspect, there will be many layers to this technology adoption life cycle, Qualcomms is primarily in encryption/compression software/hardware where they largely will compete with MPEG which is an open standard (and IS currently the standard).

More later.

Tim
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Dan, so far, Kodak, Technicolor, Cinecomm, Texas Instruments (who have refrained from announcing any alliances as yet) and Hughes/JVC have either
demoed or announced alliances with Qualcomm. Oh, and GEORGE LUCAS, and Hollywood is nothing if not follow-the-leader.

I plan to address this in my report. I'm still gathering info.

As for the Qwest-Cisco aspect, there will be many layers to this technology adoption life cycle, Qualcomms is primarily in encryption/compression
software/hardware where they largely will compete with MPEG which is an open standard (and IS currently the standard).


Excellent Tim. Thank you for bringing me up to speed. This is a very exciting market, and if Qualcomm wins a large piece of the pie the long term earnings estimates will be woefully too low.

Certainly is a lot of pain driving this potential in Hollywood. Any ideas however on how much this will cost the theatre owners who will have to install systems to receive and display the new movies? This is going to be tough on them initially.

Of course it also opens up a whole new world of revenues to the theatre owner. Movies can be supplemented with live feeds of pay per view events, all in spectacular digital quality. From a consumer point of view, this is going to the bomb.

DP
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Dan,

This was discussed a little on the CSCO board last week. Don't see you much there anymore, not that I can blame you...Most of the good people bailed months ago. Not sure what that says about me :-)

Anyway, the estimate for an all digital projection system, made by a poster ostensibly connected with the industry, is $100K per theatre. So for a 12 theatre cinema, you're looking at $1.2M. When you consider national firms like National Amusements (Showcase) or General Cinema, they would be talking in the billions of dollars to upgrade all their theatres.

I agree that digital movie delivery could open up a variety of new revenue options for theatre owners.

Examples are:

1) The ability to handle overflow demand - where I used to live, first run movies were routinely sold out at all the popular showings. Digital "film" will allow another theatre to be configured to run first run movies almost instantly, helping the owner capture the demand that might have left otherwise.

2) Reduction in personnel costs - maybe not a huge savings, given what they pay projectionists, but digital movies would allow you to use a single "projectionist" to operate several, possibly even all, of the movies in the cinema simultaneously.

3) On-demand Kiosks - This may be a stretch, but I could see a theatre offering mini-theatre booths that could accomodate 2 to 4 people using a small screen but offering viewing of any movie in the theatre whenever the customer wanted to see it. You could probably charge a premium for the convenience. The small screen might be a problem, but overall it could be a nice idea.

Anyway, as to the original point of the post, I think Qualcom might have a tough time gaining standard adoption of it's image processing methodology. I haven't seen anything specific about what benefits they might offer, but QCOM's approach would have to offer a significant advantage in quality or overall compression to displace MPEG as a standard for digital movies.

Even if they succeed, as interesting as this technology is, I would not anticipate any fundamental shifts that would create a gorilla market for QCOM or anybody else. Transferring movies digitally is a more efficient way to distribute them, but the technology to transfer very large files is there today. If QCOM's approach can replace MPEG as an industry standard, there might be the potential for large revenues from licensing, but probably not on a scale even close to that of their CDMA licensing.

The net as I see it is that the new venture between Technicolor and Qualcom has the opportunity to generate a lot of revenue with their end to end digital theatre system, but the potential market ($4B-$5B) just isn't big enough for the new company to merit and achieve Gorilla status.

Just my $.02

Steve
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More than a year ago, I saw a San Diego start-up demo their video compression algorithms by delivering full motion video (acutally a clip from Air Force One) over a wireless link to a Palm VII. The quality was suprisingly good. Do you think QCOM could be working in this cinema bowling alley to help position a combination of 3G wireless and compressed video delivery?

Think about the recent Lucent commercial of a guy watching his kid's soccer game from the hotel room and then think about the broader market for video streamed to your wirless equipped laptop, PDA, net appliance, etc.

Could this be the first stage of a potential open proprietary architecture which combines QCOM technology for wireless and video compression?
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More than a year ago, I saw a San Diego start-up demo their video compression algorithms by delivering full motion video (acutally a clip from Air Force One)
over a wireless link to a Palm VII. The quality was suprisingly good. Do you think QCOM could be working in this cinema bowling alley to help position a
combination of 3G wireless and compressed video delivery?


Qualcomm used compression technology from PacketVideo during that demonstration. We are way ahead of ourselves in connecting the dots, but I like your thinking. :)

I believe PacketVideo's compression techniques are proprietary? Not sure who has the lions share on MPEG-4. They also are planning to go public eventually, you may want to check out their website. As displayed prominently there, they are a member of Red Herring's top 100 tech company list. Check this out:


PacketVideo and Media Companies to Trial New Technology for Streaming Video Content to Wireless Handheld Devices

SAN DIEGO, CA – June 13, 2000 – PacketVideo today announced that it has agreements with over 35 global media and online companies to trial the delivery of video to wireless devices. Among the companies working
with PacketVideo to explore the streaming of their content over mobile networks are AtomFilms; Broadband Sports; Columbia Records; E!Entertainment Television Networks; Eveo; FOXSPORTS.com; Gigex.com; GO.com (ABCNEWS.com, Disney Online); Hollywood Records; House of Blues Digital, Inc. (HOB.com); ibidlive.tv; iCAST.com; Icebox; iFUSE; KLAS-TV; LAUNCH.com; MTV3 (Finland); MUSICBLITZ; Odyssey, A Henson & Hallmark Entertainment Network; Reuters Media;
Sony Pictures Digital Entertainment; sputnik7.com; Sundance Channel; Toddlerwatch.com, Inc.; Traffic411.com; Universal Pictures; VideoGreetings.com; Warner Bros.; weather.com—The Weather Channel® website; and wildbrain.com.

PacketVideo has developed standards-compliant MPEG-4 software that enables the encoding, decoding, and transmission of full motion video over wireless networks on mobile devices. The technology enables the
distribution of video over wireless networks with bit rates as low as 14.4 kbps (which is the rate for networks in the U.S. today) as well as 2.5G and
3.5G networks. The technology is air-interface independent, which means that it works across any type of wireless network, including CDMA, GSM, TDMA, GPRS, and UMTS.


That's a heckuva list of partners for a new company. This is going to be a huge player. Can you see Qualcomm acquiring PacketVideo? Man, it would sure make a lot of sense from my point of view.

http://www.packetvideo.com
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Very interesting. Don't see the big picture yet. This is not new for me though. Will be fun to watch this develop. With Dr.J you never know what he is thinking and he dosen't fail much. Anyway it would be cool to watch Gladiator on my laptop while sittin around the campfire. MORG
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I believe PacketVideo's compression techniques are proprietary? Not sure who has the lions share on MPEG-4.

I don't know either, but here's another for the mix (excerpted)

http://www.silicon.com/bin/bladerunner?REQUNIQ=961070680&30REQEVENT=&REQAUTH=21046

Thursday 15th June 2000 0:25am

GEO ports video streaming technology to Intel chips

Video and audio streaming company GEO Interactive has formed an agreement with Intel to port its A2 MPEG 4 video decoder technology onto the chip giant's StrongARM processor, which is used in mobile devices.
The deal emphasises the growing demand for Internet streaming products,and gives Israel-based GEO's Emblaze technology a significant boost in the streaming technology market.

Naftali Shani, chairman of GEO, said in a statement: "Intel's StrongARM products are one of the major platforms for mobile devices in the world. Porting to the StrongARM platform will give the Emblaze technology access to a very large portion of the mobile device market."

Dale Vile, senior analyst at Bloor Research, said this could put GEO in the running to become the de facto video standard for mobile devices.
...
StrongARM SA 1110 is already used in a wide range of mobile devices including Orange's video smart phone, Psion's Series 7 and Net Book, Compaq's iPaq pocket PC and Samsung's Any Web Phone.


Also, in http://www.silicon.com/bin/bladerunner?30REQEVENT=&REQAUTH=21046&14001REQSUB=REQINT1=37877

Samsung signs $6m deal for Geo chip technology
...
The Japanese electronics giant will be the first company to install Geo's Emblaze A3 chip technology into its mobile handsets, which will enable two way video communication.


Any more candidates for a list of providers of software for streaming mobile 2-way video? (A discontinuous innovation, surely?)

Mac
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I believe PacketVideo's compression techniques are proprietary? Not sure who has the lions share on MPEG-4.


This is getting off-topic some (though certainly worth
discussing), MPEG-4 is based on Apples Quicktime

http://www.apple.com/pr/library/1998/feb/11iso.html

and since it is open, has spawned different flavors due to Apple freely liscensing through the Darwin Streaming Server program:

http://www.publicsource.apple.com/

Any particular iteration may be proprietary, but no proprietary iteration will be accepted as the standard,
atleast in a royalty-paying sense, by MPEG. That's the whole point of it. To keep it open.

Qualcomm is basically saying that their system is much better than MPEG-4 (which is an OPEN, NON-PROPRIETARY standard), and is lining up (or trying to) the movie industry behind them. They (the Studios) don't care which flavor of codec is used, only that it is the best available, and that the savings can be realised. Both Qualcomm and Cisco are working on PROPRIETARY, OPEN codec's that each HOPE will be accepted by the movie industry for Digital Cinema, with Qualcomm planning on satellite and DVD delivery while Cisco plans to use Virtual-Private-Networks (VPN's) through Qwest.

More later.

Tim
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But, since you mentioned Packet Video...

http://www.qualcomm.com/cda/pr/view/0,1565,171,00.html

PacketVideo Closes $21 Million Financing with Key Strategic Partners

- PacketVideo Closes $21 Million Financing with Key Strategic Partners -


SAN DIEGO, Calif. – December 14, 1999 – PacketVideo Corporation, the global leader in wireless
multimedia software and services for mobile applications, today announced that it has closed a $21 million
round of financing, bringing the total equity capital raised by PacketVideo to more than $25 million.
Siemens Mustang Ventures, a participant in a previous financing, led this round. PacketVideo's investors
now include:

Credit Suisse First Boston – a leading global investment banking firm with 1998 revenues of $6.7
billion, equity of $7.1 billion, and assets of $291 billion
Intel Corporation – the world's largest chip maker and a leading manufacturer of computer,
networking and communications products
Nexus Group LLC – a private multi-stage investment firm based in San Francisco, CA whose
investments include Commerce One, Asia Online, Phone.com, Service Metrics (acquired by
Exodus Communications), Object Switch, enCommerce, net.genesis and Vstream, among others
QUALCOMM Incorporated – pioneer and world leader of Code Division Multiple Access
(CDMA) digital wireless technology and leading developer and supplier of CDMA chipsets and
system software solutions


http://www.qualcomm.com/cda/pr/view/0,1565,173,00.html

PacketVideo's MPEG-4 Multimedia Solutions Featured in QUALCOMM HDR Demonstrations



- Breakthrough Multimedia Compression Software Enables Transmission of Entertainment,
Information, and Other Programming over Wireless Networks -

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