The Next Big Thing

The Next Internet Investing Frenzy

The Next Internet Investing Frenzy

M-Commerce....What's Next?
We're just a couple of years away from a world market of a billion cell phone users. And as we make more and more of those phones smarter and more useful -- especially in the new, third-generation, or 3G, phones -- they're going to become even more dominant. 
The growth of M-Commerce is evolutionary and predictable. 

Stock Market Investments
Investing in Third Generation Wireless ( 3G Wireless ) - The Next Internet Investing Frenzy!
Our bet is that the 3G Wireless world wide licensing auction rush during the second half of 2000 will create another Internet investing frenzy. There will be winners and losers during this 3G auction mania.
Beyond this craze, we believe a number of wireless equipment suppliers will be the long term smart investments. 

What is Third Generation Wireless?

3G wireless is an all digital service optimized for data rather than voice.  Peak data bandwidth rates will reach 2 megabits per second.  This type of bandwidth will allow a multitude of Internet services to be utilized from a wireless apparatus.

What is up for auction is the radio frequencies that will allow this wireless transmission to travel.  This bandwidth is essential to any wireless network that wants to be a major contender in the wireless revolution.

Setting the Stage

During March and April of 2000, Great Britain auctioned five 20 year 3G wireless licenses for a total of more than 435 billion.  This was close to eight times more than the government had expected to raise.  This windfall for the UK economy is seen as one of the leading indicators for similar auctions in the rest of Europe and the U.S. later in the year 2000.

The U.S. Auction

The U.S. auction is scheduled for September 2000.  Estimations of the money the U.S. auctions are anticipated to raise range from a low of $140 billion to a high of $1 trillion.  The Clinton Administration originally estimated $2.6 billion, which is a huge underestimate now that the UK results are in.  The U.S. 3G auction was originally scheduled by the F.C.C. to take place June 2000.  However, the UK phenomenon delayed the auction until September 2000, so the affected parties could refine their business plans.

Winners and Losers - The Next Internet Investing Frenzy

The 3G auction will result in winners and losers.  It is expected that the short term investing craze will result from mass speculation about the winners & losers and who will be the future leaders in this technology.

From an investing point of view, expect a frenzy of trading in companies like:

Beyond Winners and Losers

Beyond the actual license winners, who will be saddled with massive debt for years without any associated revenues until their 3G networks are up and running, our money is on the backbone of the 3G craze

1)  Wireless Equipment and Supplies:  Somebody has to bring together the wireless network for any of the successful licensees.

2)  Technology and Phones:  Those with a strong track record will lead the pack in this essential area.

3)  The Biggest Potential Winner:  Qualcomm  They have the patents for W-CDMA and CDMA 2000.  These are two of the standards for most of the 3G technology to be used in the U.S.  As an added bonus, they also manufacture the chips that are at the heart of 3G phones.  With a potential world market of a billion cell phone users in the next couple of years, that's a lot of chips that might fall Qualcomm's way


  Future Sensing - Back To Basics

Unfulfilled Expectations - Wireless Gold Rush Stalled

Wireless Web Market Has Failed to Take Off...Yet!

Expectations unfulfilled...the wireless web market has failed to take off as predicted.  Just a year ago, this multi-billion dollar gold rush was being touted as the "Next Internet Investing Frenzy".  Everyone was going to be using a smart phone and this new revolution would have us all captured.  Well, there may have been some investment frenzy, but the bottom line is that the average consumer is still waiting for industry to get their "ducks in a row".

In some ways this stall was completely foreseen.  A year ago we forecasted this "gold rush hiccup" -  Here is a brief snap shot of our prediction from a year ago:  

Be Critically Aware of the Rapid Evolution

WAP technology will probably be around for another four years.  Mobile phone data speeds will get faster, but this will take several years.  So, as you buy your next cell phone, be critically aware of the rapid revolution of WAP devices.

Our Sense on the Matter

Don't spend your life savings on the newest technology in cell phones, it's going to change at lightening speed.  Remember, it wasn't that long ago cell phones the size of bricks were common place.  The only thing they are good for today are boat anchors and bookends. 

Consider This

Are you willing to pay good money for a wireless web phone that has a tiny monochrome screen, next to no graphics, lack of multimedia and good luck trying to type in a URL address to view a specially designed, second rate web site?  Is this worth your hard earned buck?  Not likely, why go backwards.  It's like buying a monochrome Game Boy or a 3 pound PDA.  Forget it, "I'll wait and spend my money on something else" claims the average consumer.  

The consumer expects certain basics these days.  As technology and the information revolution moves forward at unprecedented speed, so does our expectations.  Just think about it...the consumer has a certain baseline that they are not willing to work backwards from.  Once you are able to "sense" consumer expectations, you then have the investing ability to foresee before the masses.  

We see this "wireless hiccup" as just a "temporary imbalance".  We are in the assessment phase of this revolution.  If you really want to STAR Gaze into the future of this phenomenon, just start listing your expectations as a front end user.  Then research those businesses/future ideas that are providing lead edge technology to meet this demand.  Areas like color screens that your can see, voice recognition to replace typing from a cell phone key pad, high speed wireless to view streaming media and integrated technology so the SMART phone is really user smart.  Don't brush off this wireless revolution completely, we suggest put it in your parking lot and watch closely.  Find those companies that are willing to take off their blinders, rise above their institutional arrogance, react to consumer needs and get back to basics first.



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