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

QCOM 180.74

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Nov 3 3:59 PM EST

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To: Jim Mullens who wrote (48433)	11/4/2005 2:31:25 PM
From: slacker711	Read Replies (2) of 196425

From the above, due to the Q’s apparent “price netting” formula, the handset mfg using a Q MSM saves $1.10 on a $200 handset vs. using a non- Q chipset. This $1.10 savings amounts to 0.55% and depending how FRAND is interpreted could be considered “discriminatory”. The effective royalty rate on the total handset ASP becomes 4.45% with a Q chipset, and 5% without a Q chipset. The difference might only be .55% on the price of the handset, but it is a 10% difference in the royalty rate. We'll have to wait and see how Qualcomm defends this. Perhaps they have some examples of other practices which might stretch the meaning of FRAND. 1. Eliminate the netting, and thus charge the handset mfg 5% of the ASP regardless of who’s chipset resides within the handset. A net benefit to Qualcomm of $1.50 per handset for those with a Q chipset. That wont work. I very much doubt that Qualcomm can unilaterally raise the IPR rate for an existing licensee. Slacker

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