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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: Stock Farmer who wrote (81165)	10/17/2008 5:08:27 PM
From: David E. Taylor	Read Replies (1) of 197629

That's kind of how I originally got a ball park estimate of the upfront payment back in July - take the 7 to 13 cent EPS impact for 5 quarters, and assume a straight line amortization from 4/7/07 through 12/31/2022. That approach gave me $1.5 to $2.8 billion, which nicely brackets the actual payment. So not a bad way to do it as it turns out. My point though is that the amount to be booked into Q4 - 7 to 13 cents EPS - is a somewhat arbitrary amount that does not relate to either the actual past or the new royalty rate. OTOH, the actual upfront payment is in fact "much more" than what NOK owed for the past quarters (even using the old royalty rate) as Keitel said it was. And it's clear that the new royalty rate that NOK will pay (on top of the upfront payment amortization) is much less than the old one. If Keitel's 20 to 28 cent impact for FY2009 is used as the basis, the new NOK royalty rate comes out to around 2%. Crap. I said I'd stop speculating. I will. But it is an interesting discussion, and takes my mind of the market shenanigans <g>. David

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