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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 170.90

-1.3%

Nov 7 9:30 AM EST

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To: Jim Mullens who wrote (32297)	2/13/2003 9:21:18 AM
From: slacker711	of 196559

I’m trying to remember, but is the royalty rate lower to handset vendors if they include the QCOM MSM in the handset? I’m now getting a vague recollection of this, and if this is what you are saying, then you are very correct in saying that “QTL revenue per MSM.. was bound to drop” since market share increased significantly. I dont think that the royalty rate drops based on whose ASIC is inside. I was just commenting on the nature of the ratio itself. An example is probably the best way to show this.... Assuming an ASP of $200 and a royalty rate of 5%. If during a particular quarter, Qualcomm had a 50% share of a 10 million handset market, the $QTL/MSM ratio would work out to $20 per MSM (royalties of $100 million). If the market was flat for next quarter, but Q's marketshare went up to 100%, the $QTL/MSM would drop to $10 per MSM (same total royalties of $100 million). This might also help. Qualcomm has occassionally put the number of handsets shipped each quarter into one of their graphs (usually during analyst days). I eyeballed the numbers and recorded them here. Message 18274267 Units QTL 3Q '99 10m 4Q '99 14m 1Q '00 15m 184 2Q '00 15m 157 3Q '00 15m 161 4Q '00 15m 166 1Q '01 22m 186 2Q '01 17m 225 3Q '01 16m 180 4Q '01 20m 189 1Q '02 21m 210 2Q '02 18m 194 3Q '02 19m 199 4Q '02 22m 243 1Q '03 (proj) 26m Slacker

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