OT OT OT - VISX, et al.
Although not related, another company which relies on patents and royalty stream is VISX. Some are using laser sales to predict the future of the stock. The company gets a royalty from every procedure for eye correction. That to me is the real money maker.
Not so fast, Good Sir Spud. <g> I know a bit about that market. VISX shares a per-procedure royalty ($500, IIRC) from the use of its lasers with another large laser manufacturer, Summit (BEAM) - they agreed to some sort of royalty-sharing agreement years ago (the infamous "Pillar Point" fee, right?). Unless I'm greviously mistaken, they don't get _any_ royalties from the user of other lasers, like Baush&Lomb/Chiron's Technolas series, which is a much better seller in Canada and overseas than the VISX or Summit products.
What's more interesting is that there are a whole host of discontinuous technological revolutions that have already appeared or are coming soon to the vision correction market (which I agree is huge). These include the already FDA-approved and marketed Intacs (Keravision, KERA) product, implantable contact lenses, and corneoplasty (corneal molding) procedures. All of these have the potential (though by no means is it guaranteed) to be cheaper, safer, easier and more predictable than the current PRK/LASIK procedures that VISX lasers are used for. Time will tell on this point.
It's an interesting (and instructive) comparison to Q...IMHO, VISX's position in their market - and their future potential - is nothing like QCOM's position in wireless. In "Gorilla Game" terms, they're at most a King with a host of strong princes - nowhere near a gorilla with guaranteed royalties and a lock on a nascent 'standard'. And although any serious new-technology competition (discontinous revolution, if that's the proper phrase) to a CDMA wireless standard is years away at best, for VISX and PRK/LASIK procedures it's already here (Keravision in a sense 'crossed the chasm' with FDA approval earlier this year). The new contenders are already beginning to take their market share away. More importantly, the barriers to entry, and the cost for customers/users to adopt to a new 'standard', are much, much lower in this market than in wireless.
Future discussion of this whole topic should probably be moved to the G&K thread...sorry to be long-winded.
(BTW, the internecine battles between laser companies and their various partisan bands in the last two years make the QCOM-Ericcson CDMA/GSM standoff look like a respectful gentlemanly disagreement.)
-Rose- |
