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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 174.80+0.1%12:58 PM EST
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To: Robert who wrote (25221)3/26/1999 2:20:00 PM
From: bananawind  Read Replies (1) of 152472
 
Robert, All

Management made it clear in the conference call that the royalty agreement with Ericsson (which is only for handsets) is:
a)at essentially the same rate as all other handset licensees
b)applies equally to cdmaOne and all flavors of 3G cdma

With respect to royalties that Q will pay to Ericy:
a)they apply only to handsets Q manufactures
b)they will not prevent handset margin improvement- ie.SMALL

My guess is that the Q to E royalty is very,very small, maybe .25% or .5% at most, and is really just a face saving device to smooth the embarrassing proposition of admitting to their customers they had no cdma IPR or expertise.

Q is now poised without opposition to serve a cdma handset and ASIC market that may grow from 25 million units to 100 million units annually over the next 2 or 3 years. After that, with widescale deployment of 3G and overlay possibilities for GSM and TDMA, maybe growing to 300 million units per year in the following three years.
These are big, big markets. We are talking about billions in royalties and billions in handset/ASIC profits. The market is only beginning to come to this realization.

Best regards and thanks to all contributors. Gregg should be off celebrating [as I will] his clients' and his own excellent performance. Have a great weekend everyone.

-Jim

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