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

To: The Verve who wrote (12791)	6/21/2000 7:09:00 PM
From: A.L. Reagan	Respond to of 13582

Verve, I just talked to Nancy @ IR as you suggested. Just to clarify the issue, what I mean by "net royalties" is the net to QCOM on a companywide basis after factoring in royalties paid out by QCT on DS ASIC sales, not the segment results of QTL only. At least as I posed the question, Nancy's response was different from your post. She reviewed various CC notes while on the phone, and stated that the only public statement on this matter was a comment by IJ in a 4/18 CC that with respect to DS mode, QCOM would try to acquire rights to the GSM overlay components of DS in the most cost effective manner then available. So, assuming we are not having a disagreement on semantics, and assuming further that the GSM Musketeers aren't giving anything away for free to the Q (I think that's a pretty safe bet), I stand by my statement that the net royalty flow to QCOM on a companywide basis (assuming that we are going to sell DS ASIC's - also a pretty safe bet) for DS is going to be lower than for MC. By how much? Anybody's guess. Take an extreme case, that Q pays the collective Musketeers 24% on Q's DS sales (on account of Q not being a member of the Musketeer consortium and having to have an individual x-license with each Musketeer owning essential DS IPR), but each and every of the Musketeers, plus all of the non-Musketeers who play in DS mode, pay the Q 5% on all of their DS sales. Makes for some interesting (and hugely variable) results as you model different market shares in the DS scenario. And of course if Q negotiates its x-licenses more favorably than the standard (to non-Musketeers) old GSM "rack rate" that changes the dynamics as well. P.S. To those who don't follow every post on this thread, "Musketeers" is a term coined by Maurice Winn to describe the GSM group who have/think they have essential IPR on DS mode implementation (mostly the GSM overlay part, but of course some of them, e.g. IDCC, claim the moon). Maurice & I had quite a lively discussion on the topic of the Musketeer's patent pooling, which is now evidenced by today's announcement. By non-Musketeers I mean players that (i) are not QCOM; and (ii)have no essential IPR on any aspect of DS mode.