*Royalties 3%???!!%#@^*#<* <...Qualcomm gets its pound of flesh, which I estimate to be between 3% and 5%, from each and every manufacturer of mobile CDMA related products, regardless of the deployment mode selected...>
Hang on a moment Gregg, 3% is NOT what we have been bandying around these parts. The Koreans disclosed 5.5% for their cdmaOne and my assumption [and I think a lot of people's] was that the 3G deal with Ericy involved royalties at the same level.
You mean to say Q! caved in on all the cdmaOne stuff too. That means a very, very big cut in royalties. If the competition, which Tero still thinks will win judging from his comments, charges about 15% or maybe 20% for GSM intellectual property to a totally new entrant, the a much more efficient technology, which nobody could duplicate, even when given the IP by Qualcomm, should be sold for a HIGHER price, not a lower one.
Okay, we could allow a big discount to swing deals and maximize revenue by speeding development and market acceptance. But to drop all the way to 3% when the CDMA/VW40/GSM/TDMA wars were won seems absurd.
A couple of years ago, Q! spoke of low single figures for 3G royalties, but with the success which cdmaOne started enjoying and the evident strength of the 3G position, there seems to have been no reason to give away such a huge chunk of royalties. 3% is derisory for such technology.
That means our royalties are going to halve from what they were going to be until 3G is rolling out and then we will get half the royalties from 3G we could have had and cutting our royalties from 5.5% to 3% isn't going to make a significant difference to the rate of 3G market development.
This is a few crumbs! This is NOT a pound of flesh. Okay, you did say between 3% and 5%. And you didn't say 5.0% so maybe 5.5% still fits your range. But I don't like the lower limit. Why do you think we could be there? It seems to me that 10% or 15% would have been perfectly sensible and Ericy would have had to go with that.
Hoping for 5.5%. Now I have to halve my valuation of Qualcomm to about, let's see, MSFT$328bn+Dell$167bn+Intel$84bn+Yahoo$27bn [to allow for WirelessKnowledge]+$500bn for EudoraCoin[TM] = $1.1 trillion. We could throw in Globalstar [7% or so] plus bits and pieces.
Multiply that to allow for a much bigger market than PCs, say x 5 and we get a $5 trillion company. It's still not bad, even with the reduced royalties. The current market capitalisation of just over $10bn looks cheap.
Mqurice |
