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

To: Valueman who wrote (12851)	6/22/2000 1:23:00 AM
From: A.L. Reagan	Read Replies (1) \| Respond to of 13582

Vman, perhaps you misunderstood what I mean by the term "net royalty rate." Message 13922395 As far as I know, no x-licensing fees of any consequence are payable by QCOM relative to the sale of MC chips. Surely you do not maintain the same likely to be true wrt DS. No broken record if you look at it on a companywide versus licensing division basis. You get licensing fees in from IPR licensed to others on their sales; you pay licensing fees out on IPR of others on your own sales. These show up in different segment P&L's and different line items - so if you only look at the DS royalty issue in the context of the "royalty income" line (or QTL segment income), then yes, you are correct in terms of the Q's stated policy, which they will enforce. But if you look at it (in the future) as also being imbedded in the cost of sales line for DS chip sales, then, I submit, you will be seeing the whole picture. Maybe I need to adopt some different terminology to get this point across. Respectfully, ALR

To: Valueman who wrote (12851)	6/22/2000 1:29:00 AM
From: The Verve	Read Replies (2) \| Respond to of 13582

Value, This whole debate over what will flow into Q's pocket with WCDMA has become an excruciating puzzle of semantics. Frankly, I'm still confused over it. Q's mgmt has stated all along that royalties are the same no matter which flavor. Then the question was, "OK, royalties are the same, but how about the net effects of having to license someone elses IPR? Won't that somehow lower the royalty rate? What is the NET royalty? I discussed this with IR yesterday and they said NET royalties are the same. NET is the same. Now A.L. Reagan brings up the point that net royalties may be the same, but the net to Q's bottom line will be lower with WCDMA because WCDMA ASICS have a lower net due to offsetting IPR. AL says, "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." BTW, A.L. I plan of getting clarification on that issue tomorrow. Thanks for bringing it up. So, at least in my mind, there is still some haze about NET flows to Q in a WCDMA versus CDMA 2000 scenario. Q sure is one tough GD horse to handicap, is it not? I'm sure all these mental gymnastics are going to be the equivalent of mental masturbation when all is said and done. Probably best to use the Rip Van Winkle investing approach. lol Verve