The Rule Breaker Portfolio has passed on companies in the wireless world, in spite of its clearly revolutionary potential. Today we present three opinions from The Motley Fool editorial team about the possibility of finding Rule Breakers in wireless.

Jeff Fischer (TMF Jeff)
Wireless technology holds great promise for mindful consumers. It will continually make communication easier, task completion more versatile, and distances largely obsolete. For investors, however, wireless technology investments provide much more static.

The bottom-line value proposition behind wireless technology is still as nebulous today as that of radio technology when it emerged. We don't yet know in what order the technology's value chain will be formed, which companies will end up on top, and how large opportunities will become. Just as importantly, we don't yet know the magnitude of any long-term earnings opportunities. Giant markets do not always equate to giant earnings.

My difficulty with investing in this sector also arrives, in part, due to the many dozens of companies competing in it. Today's leading names are well known -- such as Nokia (NYSE: NOK) and Qualcomm (Nasdaq: QCOM) -- and along with their high visibility comes strong valuations. Given the valuations, I can't help but see as much uncertainty and risk in the stocks as opportunity. Meanwhile, from the dozens of smaller companies competing, it's difficult to discern which will end up being market-beating investments and which will be left behind. Working against investors is the fact that a majority will likely be left behind. In a market this segmented, most companies will only grab a small piece of its total value.

How significant the total value will be for even a huge, leading company is still a question. If selling or leasing phones were an incredibly sweet business, then AT&T (NYSE: T) would still be a monster. And if controlling access to calls will be a ticket to riches, it's going to take literally years, reaching into decades, to make that so, due to the billion-dollar price tags that companies are paying for rights to that access.

Add it all up -- giant start-up costs, segmented markets, dozens of competitors, murky profitability ratios, and long-term growth potential -- and it doesn't compute to a superior investment situation. That said, investors who work in the industry or have much more knowledge than I do have a better chance than I ever will of buying the few long-term winners. I need to keep reading the Fool discussion boards if I want to learn from them.

Bill Mann (TMF Otter)
Is the Rule Breaker Portfolio missing the boat on wireless stocks? Actually, only the first of several boats has left port. There has been some shock, amazement, and consternation in the last few months because global wireless handset sales will come up a bit shy of earlier projections of 550 million, which means that this question is about 550 million units too late.

Yeah, the Rule Breaker missed the boat. It missed on Qualcomm, which would easily sail past all of the Rule Breaker qualitative criteria. Top dog, expanding possibilities, called overvalued by the media? Sure -- I called it overvalued, so all I need to prove here is that I'm a legitimate member of the fourth estate. The only measure Qualcomm would fail deeply is the newest one: 10x/5y. There just isn't the potential for enough appreciation in Qualcomm to make it a Rule Breaker. The same could be said for NTT DoCoMo and Nokia.

Wireless communications is still the next vanguard. High-bandwidth networks (third generation, a.k.a. 3G) are still in front of us, which will cause another paroxysm of capital spending. M-commerce promises to follow the s-curve of Internet commerce: a kudzu-like "sleep, then creep, then leap" progression from the domain of hobbyists to mainstream usage. The trouble is finding the point in the chain that best portrays long-term expanding possibilities. I have two suggestions.

In August I covered, which has since merged with to form Openwave Systems (Nasdaq: OPWV). The arguments I made then still stand, though the combined company has done me the favor in the interim of producing an astounding earnings report. Openwave has recently signed additional deals with companies such as Cisco (Nasdaq: CSCO) and Schlumberger (NYSE: SLB), in China and in Argentina to provide the front- and back-end of wireless Web browsing, while its most capable competitor, Nokia, struggles with re-releases of its own offering.

There is another, very small company that could qualify: California Amplifier (Nasdaq: CAMP). CalAmp is in a little backwater of the wireless industry. It provides transmission equipment for fixed wireless networks. Since many DSL providers are blowing up and the network limitations of cable Internet are becoming clear, consumers and providers are looking at alternatives. Enter fixed wireless broadband, which can transmit at speeds of 1.5 Mbps, requires significantly smaller capital expenditures than wire-line installations, and has proven to be equivalently reliable in any area where line-of-site can be achieved. CalAmp has a contract to provide some 75% of Sprint's (NYSE: FON) fixed wireless equipment, which in practice has meant 100%. Sprint has launched service in Phoenix and Silicon Valley to rave reviews. In areas where wire-line alternatives do not exist, such an option as fixed wireless broadband could reach millions of consumers.

Wireless still may be the ultimate Rule Breaker industry, though the vast majority of companies that currently address this market will turn out to be pretenders. The Rule Breaker community should definitely look here, but tread with extreme care. It is not sufficient to find the industry if one cannot also identify the winners within.

Tom Jacobs (TMF Tom9)
"Wireless" isn't an industry, but a collection of technologies. I'm looking hard, but I can't find any that support an important, emerging industry with Rule Breaker candidates for investment today.

Wireless voice and data service providers are Internet service providers (ISPs) or long-distance or local telcos all over again. Yawn. Satellite wireless communications? It'll take a better-funded and executed plan than Globalstar's (Nasdaq: GSTRF). Wireless infrastructure includes hardware and software enablers. Hardware doesn't light my Rule Breaker fire, with handset and wireless-ready Personal Digital Assistant (PDA) makers lacking sustainable advantages.

Software for wireless once offered an intriguing possibility. We've discussed, now half of Openwave Systems. Unfortunately, we missed buying Openwave at its true Rule Breaker stage: before merged with and formed Openwave, before wireless application protocol (WAP) actually arrived, with questionable results, and before Qualcomm competed through its BREW platform. Qualcomm, in fact, may have been the one true wireless Rule Breaker, with its patented CDMA technology for voice and data transmission. But the time to buy was when Europe announced that Qualcomm's CDMA technology would be the standard for the 3G high-speed wireless communication networks. Today, with once-dismissed Qualcomm now the center of a growing worldwide wireless value chain, Qualcomm's market cap leaves little room for Rule Breaker returns and has entered the world of possible Rule Makers.   

I suspect wireless Rule Breakers are out there, but I'll have to look harder. 

Jeff Fischer still owns an Intel 286 computer with 8 megs of RAM and he actually had to use it last week to find an old file on a floppy disk. To see the stocks that he owns, view his profile. The Motley Fool is investors writing for investors.

Bill Mann doesn't hate Qualcomm. At the time of publication, he had beneficial ownership in Openwave Systems, California Amplifier, and Nokia. To see the stocks that he owns, view his profile.

Tom Jacobs (TMF Tom9) thinks a good wireless technology is to talk louder. He owns shares of Qualcomm and Globalstar. To see the stocks he owns, view his profile.