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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 174.54-1.2%Nov 13 3:59 PM EST

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To: Lynn who wrote (65547)1/31/2000 7:38:00 PM
From: Johnnie Memmonic  Read Replies (1) of 152472
 
Ahem,

Let's see what was said by my favorite poster, Greggs Power:

www3.techstocks.com

"Qualcomm's royalties are established by contractual agreement with each licensee. The contractual agreement
with Ericsson does not differentiate between the royalties derived from WCDMA and cdma2000. The patent
pool approach, to which you allude, was attempted by the Europeans but rejected by Qualcomm."

www3.techstocks.com

"RE: Are you saying that Q and E will be the only patent holders to
receive royalties for 3G?

I am not suggesting this at all. Let's put this in perspective. Qualcomm developed a body of intellectual
property that proved central to the commercialization of mobile direct sequence spread spectrum.
Recognizing that it is better to participate in a large opportunity rather than dominate a far smaller one,
Qualcomm management adopted a strategy of licensing its core technology to major wireless equipment
manufacturers including Lucent, Motorola, Nortel, Samsung, Nokia etc. All of these agreements provided the
licensee would pay Qualcomm a fixed royalty, based on the manufacturing transfer price, in exchange for the
right to use Qualcomm's intellectual property.

If a licensee required additional IPR in order to achieve its intended design specifications, it is incumbent on
the company to license this technology from its rightful owner (and pay additional royalties). Incidently, one
of the advantages of CDMA over GSM is that so much of the core IPR is available from one vendor, i.e.
Qualcomm. I have seen several studies indicating that a new entrant to the GSM market, with nothing
proprietary of its own to trade, would wind up entering into in excess of ten license agreements and paying
royalties in greater than twenty percent (of manufacturing transfer cost).

So my point is simple. Qualcomm gets its pound of flesh, which I estimate to be between 3% and 5%, from
each and every manufacturer of mobile CDMA related products, regardless of the deployment mode selected.
Thus the royalty terms are contractually established and fixed."

I can't believe that what was said repeatedly along time ago and still can not comprehended by the press today!

Regards,
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