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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 172.72-4.4%Nov 4 3:59 PM EST

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To: slacker711 who wrote (48427)11/4/2005 12:27:21 PM
From: Jim Mullens  Read Replies (1) of 196444
 
Slacker, Re: BRCM Royalty Issue and “How in the world is this a perception issue? It is pretty simple, if a handset manufacturer uses a Qualcomm chipset instead of an identically priced Broadcom chipset, they pay less royalties”

I don’t see it that way. The royalty on the handset is based on the Handset ASP in each case-
$200 @ 5% = $10 in ROYALTIES payable to the Q from the handset mfg.

The $1.50 is paid by BRCM to the Q as a fixed amount per unit for IPR use, and therefore not a percentage based royalty.

Or,do you not believe the Q should be compensated by the chipset mfg for its IPR?

 

...Handset W/ Q MSM W/O Q MSM

Handset ASP ........$200 $200
H/S Royalty to Q @ 5% ........$ 10 $ 10

Chipset
..Q Chipset Rev ........$22
..BRCM chipset Rev ........ $22

Chip IPR rev to Q
..Q chipset $0
..BRCM chipset ........ $ 1.50 (new method- $/unit , not % of Chip ASP

Summary
..Qualcomm Rev/ HS
....H/S royalty ........ $10 $10
....Chipset Rev
......Actual Chipset $22 $ 0
......Chipset IPR $ 0 $ 1.50
....Total $32 $11.50

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