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Technology Stocks : Nokia Corp. (NOK)
NOK 6.585+0.8%Dec 24 12:59 PM EST
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To: Grad B who wrote (4759)4/12/2007 6:30:48 AM
From: waitwatchwander  Read Replies (1) of 9255
 
3% of what ??? I see Nokia uses the term "aggregate handset sales". How is that defined? Both Nokia and Qualcomm see the same royalty cheque, so the place they differ has to be in the denominator.

Here's an example that might work. Nokia sells a handset to an operator for $100 and charges an additional $50 in marketing fees. They send a cheque to Qualcomm for $4 (4% royalty). Then, if they define aggregate handset costs as both costs ($150), they can say their royalty rate on aggregate handset sales is 2.7%.

The above is somewhat like what they are now doing with ODM's (or whatever Eric calls them) for their cdma handsets. Partial information to undo confusion only leads one to speculate further. Don't they get it or are they just protecting themselves from issues bubbling up elsewhere?

It might also be that Qualcomm is adding in something extra to the top of Nokia's actual cheque. Maybe it is an amount for the cross licencing fees that they are always dancing around. Here is how that would work. Nokia sells the same hansdet but sends a cheque to Qualcomm for $2.70. Qualcomm records the payment as royalty sales in the amount of $3.30 and an royalty expense of $0.60 paid to Nokia for cross licencing.

Isn't it time Keitel started spoke up about what is happening with these payments as they proceed through his ledgers. Lupin's words may be legal but they certainly don't seem to be helpful.
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