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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Mihaela who wrote (37554)	2/26/2000 9:59:00 AM
From: Mihaela	Respond to of 93625

Could Rambus be the next Qualcomm? Fayad Abbasi Rambus NASDAQ:RMBS Technology Quote \| News \| Snapshot \| Charts \| SEC \| Ratings Feb 3 2000 As the battle for memory market share heats up, manufacturer Rambus (Nasdaq: RMBS) stands on the brink of becoming the next Qualcomm (Nasdaq: QCOM). The similarities in the business models of the two companies are closer than those of most other companies, and Rambus no doubt hopes its story will continue to unfold in the same manner as that of the wireless technology giant. Both companies devote significant resources to research, and as they have developed new technologies both have assimilated patents on their research for what is expected to be the future of their respective markets. Qualcomm emerged as the hottest stock in 1999 because it owns the patents for narrowband CDMA technology. Any company that manufactures a cell phone utilizing the CDMA technology must pay Qualcomm a royalty. And with CDMA technology emerging as the de facto standard for cellular transmission, Qualcomm stands to earn a significant amount. Rambus has pursued a similar strategy: by licensing its Direct Rambus dynamic random access memory (RDRAM) technology to memory manufacturers, the company stands to earn royalty revenue for its memory products. However, the future for RDRAM is much less certain than that for CDMA, as there are several competing standards battling for market share. The interesting aspect of the battle, though, is the lawsuit Rambus filed against Hitachi, claiming Hitachi?s synchronous DRAM (SDRAM) products infringe on Rambus? patents. The outcome of the lawsuit looks set to be a turning point for the market. If the decision is made in Rambus? favor, the company will receive royalties for SDRAM in addition to RDRAM. And if other memory manufacturers infringe on those patents, Rambus could see royalty payments for the entire DRAM market. The total memory market, of which DRAM claims the majority, was worth approximately $22 billion in 1998, and that value is expected to grow 25% through 2002. While we do feel Rambus is unlikely to sue all SDRAM manufacturers, other rivals will closely follow the outcome of the Hitachi lawsuit. Rambus? patents may prove to be more valuable than many people think. streetadvisor.com