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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 169.27-4.8%3:59 PM EST

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To: METMAN who wrote (465)1/16/1997 9:56:00 PM
From: Philip Merryman   of 152472
 
METMAN,

Qualcomm receives a royalty for every CDMA handset Samsung sells. There is another component to the revenue Qualcomm realizes from the sale of CDMA handsets by other manufacturers such as Samsung and that is the Application Specific Integrated Circuits (ASICs) used in CDMA handsets. Each CDMA handset requires an ASIC which is only available from Qualcomm or one of Qualcomm's subscriber equipment ASIC licensee's, VLSI Technology and DSP Communications. Therefore, for every CDMA handset sold by Samsung or another CDMA handset manufacturer, Qualcomm receives 2 payments: 1. a royalty for the CDMA handset itself and 2. either revenue from the direct purchase of the necessary ASIC or a royalty from the subscriber equipment ASIC licensees.

ASICs are needed for CDMA infrastructure equipment as well but Qualcomm at this time is the sole supplier of these ASICs.

Philip Merryman
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