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

To: Bilow who wrote (41436)	5/7/2000 10:03:00 PM
From: Bilow	Respond to of 93625

Hi all; Re business reasons motivating the memory makers to hurt Rambus. (Add to my post #reply-13595407 ) I noticed another link about Rambus, royalties, and the memory makers attitudes. It's from back 3 years ago, but it still holds true: September 23, 1996 "There seems to be a fixation on royalties. [But] Rambus has always given us the indication that royalties would be minimal, maybe 0.5% to 1%," said Jim Handy, senior analyst at Dataquest Inc., San Jose. Even so, some of the larger DRAM vendors could find they are spending more on royalty payments than on R&D, Handy said. As an example, he cited Samsung, which racked up DRAM revenue of $6.6 billion last year. A 1% royalty would have cost the company $66 million, Handy pointed out. And rather than pay it, a manufacturer might well prefer to spend $10 million on its own R&D. Moreover, some DRAM vendors are unwilling to relinquish so much control to an upstart intellectual property company. "[Rambus] has one engineer for every 200 that the rest of the industry has," Robillard said. "It stifles the creativity of the industry, and all improvements have to flow through Rambus." techweb.com -- Carl P.S. Where are all those business reasons that the DRAM makers have for helping out Rambus??? Surely the bulls can do better.

To: Bilow who wrote (41436)	5/7/2000 10:55:00 PM
From: jhg_in_kc	Respond to of 93625

I can boil down your reply to the reasons why the memory industry would like to walk away from RMBs as 1) they dont want to pay high or possibly any royalties 2) they see using RMBS hurts their brand names and raison d'etre by making chips into a commodity (unless they have "RMBS inside") and hurts profits because it adds extra costs to doing business. This of course leads one to ask well, what will they do: they have to come up with an alternative to RMBS technology to avoid being commodity makers and they have to come up with it as a group. The chances of this happening are probably minimal. They would have to agree among themselves as to what it is, who invented it, etc. If let's say I, JHG, came up with a new JHG alternative to RMBS, this would do them no good. I would want roayalties, too. The truth is they ARE makers of a commodity without any new technology to advance what they make. whoever comes up with a new techonolgy beyond RMBS will squeeze them too and so they will have to start their obstrucitionism all over again. with Intel's backing of RMBS --that is the key of keys-- they are doomed to accept RMBS. If Intel drops RMBS, it is doomed. Why would INTC drop RMBS just to satisfy a bunch of commodity makers? jhg