Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 174.80

+0.3%

Dec 5 9:30 AM EST

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To: Techteam who wrote (16233)	10/9/1998 11:56:00 AM
From: Gregg Powers	Read Replies (1) of 152472

Techteam: There remains a logical disconnect in your position. QC's royalties for Q3 were $46mm. The nominal amount of non-QC handset and infrastructure revenue can be approximated, albeit with some effort, on a quarter-by-quarter basis. You can then compare the magnitude of total non-QC IS-95 equipment sales to QC's reported royalties and derive a royalty percentage. Even the most mathematically impaired observer should be able to derive a royalty percentage that is far closer to 5% than 1% (or the zero that you suggest some are paying). The company makes no secret that there were royalty sharing arrangements with major licensees such as Motorola. It also makes no secret of the fact that these agreements provided for a bounded amount of dollars to be shared with the OEM, after which the net royalty rate would move higher. The company has never disclosed the exact royalty rate payable by any OEM, for both tactical and strategic reasons. Nevertheless, please explain how QC managed to earn $46mm in royalties in a single quarter if there are a bevy of OEMs paying little to no royalties?

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