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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: Jim Mullens who wrote (48428)	11/4/2005 12:40:43 PM
From: slacker711	Read Replies (3) of 196444

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? The issue isnt the royalties from the chipset manufacturers, it is the discount for the handset manufacturers that use Q's chips. Q isnt charging a royalty on the entire price of the handset. They are netting out how much that manufacturer pays to Qualcomm for the chipset. In your columns, change the royalty to Q for a handset with an MSM from $10 to $8.90 (($200-$22)*.05). That $1.10 in IPR savings is dependant on the handset manufacturer using a Qualcomm chipset. If they use a merchant chipset from anybody else they dont get that savings. There is an issue here even if the chipset used is TI's, who doesnt pay royalties to Qualcomm. Slacker

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