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Technology Stocks : PairGain Technologies

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To: Rick Smith who wrote (21849)	3/19/1998 11:24:00 AM
From: bronco2	Read Replies (2) of 36349

I am trying to understand why the royalty payments are so low when the estimated retail price per modem will be in the $200-$300 range. Assuming-- (I am throwing some vary loose numbers out here) $200 retail price $100 rockwell receives for each modem - $50 cost to rockwell to make modem ----- $50 profit to rockwell $1 profit to pairgain (subtract R&D ?) Why does pair only receive $1 in royalties from rockwell? It seems to me that the most valuable part of the modem is the pairgain falcon chip. To all: Don't take this as negative, I'm lonnnnnnnnnng on pair.

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