For Subscribers

Get the complete article now!

Eleven analysts and top management from sixty-one sector firms examine the technology & communications sector in this special 238-page U.S. Bancorp Piper Jaffray Technology & Communications Conference issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info396.htm

TWST: What do you see as the trends and issues that are having an impact on the wireless communications equipment area?

Mr. May: We have three different areas of focus. We have the large cap systems companies — Motorola (NYSE:MOT), Nokia (NYSE:NOK) and Ericsson (Nasdaq:ERICY), and we include QUALCOMM (Nasdaq:QCOM) in that because of its importance on the intellectual property side and technology side of CDMA, which is the basis for a large part of the cellular systems. The second area of focus is the component and subsystem suppliers for the handset and infrastructure markets within mobile cellular. The smallest market focus is fixed wireless access. There has been a fair amount of carnage there with recent IPOs, because of the fall-off in capital spending and the problems in funding for CLECs and ISPs. So that sector is de-emphasized right now.

The one stock I would highlight there is Proxim (Nasdaq:PROX), which has been around for 15 years and has a stable business model, good profitability and good growth prospects. The current dynamics are three main focuses: new subscriber growth; spending by operators on infrastructure; and the replacement market for handsets. The replacement handset market is interesting. How many people who have handsets are going out and buying new handsets, and why are they doing that? Are they doing it because they can get one cheaper, because they can get one lighter with a better battery and better talk time? Are they interested in new data services? What is the effect of overall consumer slowdown on the replacement rate in cell phones? What we have is subscriber growth approaching 1 billion worldwide, so the law of large numbers begins to evidence a slowdown in handsets driven by new subscribers. But we have a large base of subscribers who are going to be replacing their phones at a certain rate, so a lot of the focus right now is on the replacement rate — what is driving the replacement rate — and coming up with totals for number of cell phones sold per year. The other big consideration is infrastructure. Infrastructure spending in the present moment is driven by call capacities. Most people who have cell phones are familiar with fast busy signals, which indicate not that the party you’re calling is busy, but that the network you’re trying to use doesn’t have enough capacity for you at that present moment. Operators are well aware of their call capacity problems, but often they choose not to make the improvements they need to make because they’re also worried about profitability. So there is a lot of bad quality out there in networks, and the question is how much capital expenditure are operators willing to put out. When there is economic uncertainty, that is one thing that is easy to postpone. The other big driver out there for the infrastructure market is the migration to third generation and 2.5 generation technology. The current generation of technology we’re using is called second generation, or 2G and there is a lot of money being spent to migrate from second generation to 2.5 and 3G, but there has also been a lot of push-out. New spectrum has been auctioned and allocated for 3G, but given the macroeconomic condition in the world, we’re seeing a lot of push-out in actual expenditures.

This special issue includes:

1) Wireless Communications & Mobile Computing - In an in-depth (1,600 words) Analyst Interview, Samuel May, Managing Director of U.S. Bancorp Piper Jaffray Inc., examines the outlook for the sector and shares specific stock recommendations.

2) Mobile Computing Communications - In an in-depth (4,100 words) Analyst Interview, William Crawford, Vice President at U.S. Bancorp Piper Jaffray Inc., examines the outlook for the sector and shares specific stock recommendations.

3) Business Commerce & Software - In an in-depth (2,200 words) Analyst Interview, Jon Ekoniak, Vice President at U.S. Bancorp Piper Jaffray Inc., examines the outlook for the sector and shares specific stock recommendations.

4) Entertainment Software Stocks - In an in-depth (2,700 words) Analyst Interview, Anthony Gikas, Vice President of U.S. Bancorp Piper Jaffray Inc., examines the outlook for the sector and shares specific stock recommendations.

5) Collaborative Enterprise Commerce - In an in-depth (2,600 words) Analyst Interview, Timothy Klein, Research Analyst at U.S. Bancorp Piper Jaffray, examines the outlook for the sector and shares specific stock recommendations.

6) Outlook for Optical Components - In an in-depth (1,700 words) Analyst Interview, Conrad Leifur, Vice President of U.S. Bancorp Piper Jaffray, examines the outlook for the sector and shares specific stock recommendations.

7) Technology & Business Services - In an in-depth (2,800 words) Analyst Interview, Brett Manderfeld, Vice President of U.S. Bancorp Piper Jaffray, examines the outlook for the sector and shares specific stock recommendations.

8) Education & Learning Services - In an in-depth (2,300 words) Analyst Interview, Mark Marostica, Senior Research Analyst covering Learning Services at U.S. Bancorp Piper Jaffray, examines the outlook for the sector and shares specific stock recommendations.

9) Broadband Service Delivery - In an in-depth (3,600 words) Analyst Interview, Frank McEvoy, Vice President of U.S. Bancorp Piper Jaffray Inc., examines the outlook for the sector and shares specific stock recommendations.

10) Internet Media & Commerce - In an in-depth (4,200 words) Analyst Interview, Safa Rashtchy, Vice President of U.S. Bancorp Piper Jaffray, examines the outlook for the sector and shares specific stock recommendations.

11) Communication Services Companies - In an in-depth (4,000 words) Analyst Interview, Cary Robinson, Vice President of U.S. Bancorp Piper Jaffray Inc., examines the outlook for the sector and shares specific stock recommendations.

12) CEO and Sponsored interviews (average 2,500 words). Top management of sixty-one sector firms examine the outlook for their firm and the sector.