Qualcomm Inc (QCOM)

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Wi-Fi's Wobbly Future
John Dobosz, 06.21.04, 12:10 PM ET

NEW YORK - George Gilder's following approached cult status during the tech-bubble days of the late 1990s. Gilder termed his vision of the new wired and digital world the "telecosm" or convergence of computers, communications devices and even appliances in a seamless global web of high-speed interconnectivity. The paradigm never really broke down, but the portfolio did when the tech and telecom sectors fell hard in the 2000-2002 bear market.

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But now Gilder is back, and with flourish. The model portfolio of his Gilder Technology Report, as tracked by the Hulbert Financial Digest, returned 123.5% in 2003, and 51% in the last 12 months--thanks to a resurrection of some of his legacy technology names, and Gilder's increasing interest in the resurgent wireless sector. Gilder's vision of a wired world is still on track, minus the wires. "Cheap abundant storage and infinite bandwidth seem to be coming into reach," he says, "The rub is connectivity across the murky micro-tundras between all that storage and fiber."


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Due to what Gilder calls "regulatory sclerosis," demand for last-mile broadband fiber is going unmet in the United States. Instead, high-speed wireless access services can leapfrog the fiber lines directly to your computer and provide even higher rates of data transmission-- over the same CDMA network that's already in place to route cell phone traffic. In fact, wireless bandwidth may soon surpass the bandwidth of broadband to the home, and the Centrino chips from Intel (nasdaq: INTC - news - people ) that enable wireless access on PCs, will become obsolete.

Because of its progress with chip technology to handle so-called "3G" services like high-speed wireless access, Qualcomm (nasdaq: QCOM - news - people ) is a core holding of Gilder's. He calls Wi-Fi a "mirage" of connectivity because of its non-continuous zones of coverage, and says that Qualcomm's CDMA technology will render Wi-Fi "superfluous." Companies like Verizon (nyse: VZ - news - people ) are already rolling out 3G wireless connectivity, and soon AT&T (nyse: T - news - people ) is likely to do the same in a reconstituted form of AT&T Wireless on the Sprint (nyse: PCS - news - people ) network.

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