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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 137.34+0.8%Feb 6 9:30 AM EST
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To: Jim Mullens who wrote (59028)1/25/2007 7:55:31 PM
From: slacker711  Read Replies (1) of 197626
 
QTL revenue reported................$600M
...Shortfall...................................196M
....Detail>>>....
....1. Pantec..................................14
....2. QCT adj................................. 8
....3. ERIC- lower rate.................... 65
....4. Other mix- lower rate............ 16
....5. 3rd Party rights acquired??
.......assuming a royalty give back...93M

I'm having trouble understanding where you came up with your numbers. The royalty rate in the last four quarters before this one was 4.6%, 4.5%, 4.45%, and 4.15% respectively. I think 4.5% is a reasonable baseline number.

I used a 3.9% royalty rate for QCT. That is about the average adjustment that Qualcomm gave out for the historical numbers that are on their website.

Using that I get....

QTL Reported Revenue              $600m
QTL Revenue based on 4.5% rate    $718.2m

QTL Shortfall                     $118.2m
QCT lost royalties                 $48m


So we have $70.2 million in unexplained royalty loss. Keitel again mentioned the "market development funds" as well as Pantech, the pass-through rights and Sony Ericsson gaining share. Unfortunately, I dont think we are going to be able to split up the source of the royalty loss with any preciseness. We might need another quarter of data. One thing is for sure, the drop is more than a little disturbing. We have lost $300 million due to legal fees and if you add in the annualized $280 million from this lower royalty rate, you are talking about an unbelievable amount of lost earnings.

Slacker
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