The New Qualcomm - a S&P500 company Message Board

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Technology Stocks : The New Qualcomm - a S&P500 company

QCOM 175.01

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To: Valueman who wrote (4472)	12/23/1999 9:39:00 AM
From: slacker711	Read Replies (1) of 13582

What does Kyocera bring QCOM? Well, they paid up the cash(not much I'm sure), they signed the contract to use Q ASICs for 5 years, and they agreed to this goofy set up with the R&D division(do you really think cost plus will ADD to margins???). Actually I'm not really sure that we could have gotten much more out of Kyocera.... 1) They agreed to pay the current IS-95 royalty rates. I had always assumed that the rate would be reduced for a buyer of the handset division. 2) The agreement on ASIC's is almost painfully absurd. There is NO WAY that Nokia or Mot would have agreed to this....My interpretation is that 70% of ALL CDMA phones will have to have Q's chips. This seems to include IS-95, CDMA2000, W-CDMA, and CDMA/GSM or CDMA/PHS phones. If Molloy is right that Nokia would have taken this and all Qualcomm had to do is reduce royalties I probably would have gone this route (obviously depending on the size of the reduction in royalties). What I cant figure out is why they kept a subsidiary to do design....was this a Qualcomm demand or did Kyocera want it this way. I dont know who this benefits....except the employees of the division. Maybe this was the driver.....or perhaps Clark's concerns about staying close to handset design. Slacker

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