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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (2507)	10/19/1999 12:12:00 PM
From: Bux	Read Replies (2) \| Respond to of 13582

Anybody have any ideas how the Q would structure a license for a chip that would eventually be incorporated into a laptop? I dont think that the box-makers would go for a 5% off of the top royalty....though it never hurts to dream <g>. I've been wondering about that myself recently. Currently Qualcomm collects a royalty on the chip based on the selling price of the chip and a royalty on the handset based on the price of the handset. I imagine the licenses for computers and other devices will be structured similarly but with different percentages. I think it will be a number of years before the CPU and the wireless ASIC are on one piece of silicon so the royalty for the ASIC in a computer application may not change from a handset ASIC and may in fact be the same ASIC that is used in the handsets. With regard to the royalty on the subscriber device, or computer for example, it makes sense that the royalty be less as a percentage of the price of the device since a computor sells for much more than a phone and the functionality of the device extends beyond a wireless connection. But the overall royalty per device is likely to be much higher than for a phone because of the higher price of the computer. So far, Qualcomm management has shown excellent judgement when setting royalty rates. This is evidenced by the rapid growth of both CDMA and Qualcomms royalty stream. I have no reason to believe they will not show the same amount of acumen when negotiating royalties for other devices. Since Qualcomm, and CDMA in particular,is in a much more secure bargaining position now and especially when it comes to data, I think shareholders will be very impressed with future royalty streams. Bux