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

QCOM 174.54

-1.2%

Nov 13 3:59 PM EST

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To: Ramsey Su who wrote ()	3/10/2000 7:26:00 PM
From: the_rich_janitor	Read Replies (3) of 13582

A matter of Nokia buying chips or licensing QCOM ASIC design. Which is better: 1) Nokia buys MSMs for about $X. Q makes about 50% margins or about $ 1/2X per chip. 2) Nokia licenses MSM design for a royalty of $ 1/4X per chip. the second scenario is a win/win for both parties. In short, Nokia saves a few bucks per chip and retains in-house expertise (should say 'gains' in house expertise), and QCOM gets higher margins despite less actual earnings. Why is the Nokia deal in the bag? MSM5000 samples, that's why. Nokia needs to start development ASAP and cannot sit around trying to make their own 1XRTT ASIC work while everyone else is developing 1X phones. More to making a phone than just slapping the pieces together. Trials start this summer. QCOM is not obligated to give Nokia MSM5000 samples. I'll bet they require a purchase order first. I would. jmo, - TRJ

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