While I've taken some of my Rmbs off the table for now, you are quite wrong about the fundamentals of this company. (I took some off to reacquire lower because the run up in the last few days was so explosively fast and far that it HAS to pull back. As it now has a bit.)
A commodity is, by definition, a product which a large number of producers can make functionally identical versions of, and which therefor sells on price and availability alone. Oranges, wheat, pork bellies and crude oil are commodities. RAM of a given specification is a commodity. Coca Cola, autos, operating systems, application software, and homes are not. RAM has the further disadvantage of being a high capital input commodity.... very bad for RAM producers who don't time their entry perfectly.
You can avoid being a commodity producer in a number of ways. (The great majority of successful companies in our economy at least partly avoid being commodity producers through at least one, and often several, of these stratagems.) You can have a consumer branded product, which has status and other differentiated characteristics in consumers' eyes. You can improve your product and/or your efficiency in producing it quickly enough that others never really catch up with you; or your craftsmanship can be such that others can't or don't fully catch up. You can create a brand identity through advertising and past consumer satisfaction, and keep changing your product so that other's never "catch" up with your latest creations. (Fashion, cars, etc.) You can have intellectual/industrial secrets, which, while not patented, others cannot fully discover, or by the time they do, you have further improved the product. And you can have design secrets (intellectual property) which are protected by the full weight of the law, generally through patents and/or copyrights.
Rambus does not produce commodity chips, and its business model provides that it never will. Instead it has designed, and protected by a dense thicket of patents, a memory/processor interface which is more than an order of magnitude faster than existing systems. A system which Intel fully supports, and may well exclusively support. Intel is strongly backing Rambus because their RAM interface is vital in enabling the ever faster processing speeds of Intel chips to be fully reflected in faster computer speeds. I.e., Rambus' IP removes an increasingly choking Ram access bottleneck.
(And it is also not in Intel's interest to have to support multiple competing high speed RAM interface standards.)
Those who license Rambus designs, the RAM chip makers, will remain commodity producers. The advantage an early adopter like Toshiba has over later entrants will not be significantly protected, and will erode fairly quickly as others get up to speed. Those who do not adopt will in time be locked out by the market; those who are late will suffer the usual fate of late commodity producers.
Rambus on the other hand is in the catbird seat. It is selling fully proprietary and patent protected technology. It is the absolute antithesis of a commodity producer. The polar opposite.
Now in time Rambus's patents will expire. But 17 years is an ice age in the technology game. Way before then RAM interface speed needs will again ramp, and a new generation of RAM interface design will again be needed. Nothing guarantees that Rambus will be the one whose designs best fill that need; or that Rambus will be able to re-create as successful a thicket of patents around any new or greatly improved interface it might design in the future. But implementation of that is probably 5 years or so off. (I imagine that Rambus is or soon will be doing some R&D on those next generation designs right now. Hope so. Good use of some of the torrent of royalty cash that will gush down on their heads starting early next year.)
Ironic perhaps that an archetypal IP only vendor will derive its utterly non-commodity revenues from commodity producers. But there you are. That's where it's at.
If you still don't understand, you flunk. Perhaps you are not ____ material. (Fill in your Alma Matter.) <gg> Seriously, hope this helps. If its understanding you are after.
Doug
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