Some of the investment TV shows in post-collapse America, like CNBC’s Fast Money, resemble Jim Cramer’s rants during the worst days of irrational exuberance. The panelists on the Jan. 27 Fast Money attributed near-supernatural powers to Apple’s iTablet launch. They also mentioned Qualcomm’s 9 percent drop in stock price (which expanded to 12 percent Jan. 28), tying it in some strange fashion to iTablet.
Hold on a second – sure the iTablet will play an important role in challenging both smartbook and netbook designs. But it is based on a PA Semi processor with an ARM core. It needs to face tablet prototypes coming straight out of the smartbook world, such as Freescale’s platform based on the i.MX. And Qualcomm reportedly is a supplier to Apple for the iTablet, probably for MSM baseband chips used for 3G service. Thus, the Fast Money analysis is wrong on so many levels, it is nearly breathtaking. (These same analysts suggested challenges to the Amazon Kindle in the ebook world, to an extent that just made no sense for either Apple or Amazon.)
Notice that analysts who follow Apple closely on a regular basis have a much more nuanced approach to the entire wireless handheld world. Ashok Kumar of Northeast Securities, for example, watches where the chips will fall in tablets, smartbooks, and netbooks, and offers informed speculation on the iPad internal design – as well as intelligent assessment as to what it will mean for Qualcomm and other ARM vendors. And Tim Luke of Barclays Capital told EE Times that the biggest chip losers from the iPad rollout could be Intel and AMD, since Apple will give alternative processors a shot in the ARM (I know, I know).
As for the 12 percent drop in Qualcomm stock price, which caused a generalized technology selloff in the Jan. 28 market, it’s pretty obvious that the company’s lowered target for revenues for the year was to blame for the turmoil. Some of the revised outlook may be due to the recession, but some may be a practical effect of a lower presence for CDMA air interfaces globally. Qualcomm also warned that more revenues in developing nations were coming from bargain-basement handsets, rather than smartphones, which would impact chip profitability. But The Wall Street Journal was one of the few sources to play the story correctly, pointing out that Qualcomm’s first-quarter profit doubled at the same time.
The point is not to sugar-coat any news. Qualcomm, Amazon, Intel, AMD, as well as Apple and ARM, face challenges, and face good prospects in the handheld space. But the tendency of TV shows and online sites to shout loudly and often is similar to the problem of cheering sections at a State of the Union speech, which an NPR commentator mentioned Jan. 27. Where partisans used to cheer for the segments of a presidential speech they liked and sit quietly for the parts they didn’t, they now resemble high-school cheerleading teams. The party in power cheers lustily and often, while the outsiders are sullen. This is not a nuanced response, this is infantile.
We all know how Jim Cramer fit that infantile definition in the days before the 2000 and 2008 crashes. Do we really want to see that kind of loud and empty-headed response to events like the iTablet launch, and Qualcomm’s (unrelated) earnings report?
Loring
