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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 178.29-1.6%Dec 12 9:30 AM EST

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To: Dan Ross who wrote (3399)8/11/1997 5:24:00 PM
From: J. Kerner   of 152472
 
DR,

I'm not sure how I'm missing the point. Everyone knows that royalties go directly to the bottom line for the most part. My question was how much royalties would grow as a percentage of revenue.

1st of all, I do not find it disturbing that QCOM would be neg. if not for royalties as long as royalties are growing as a percentage of revenue. What I am trying to figure out:

1) What are royalties currently contributing to QCOMs top and bottom line as a percentage of revenue? Do they get a royalty for each phone sold(how much do they get per phone?) or are its deals with companies flat fee arrangements?

2) What are royalties projected to contribute as a percentage of revenue, say 2-3 years down the line and what growth rate should we be looking for?

3) What other revenues besides royalties does QCOM generate as a result of holding the patent on CDMA technology?

Just trying to figure out what Qualcomm's long term prospects look like. Their phone business will probably be nice, but won't be the driving factor that turns QCOM into one of the high flying companies of the 2000s. Thanks in advance.
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