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

To: Dan3 who wrote (46952)	7/11/2000 12:34:07 AM
From: KeepItSimple	Read Replies (1) \| Respond to of 93625

>What's 2% of the selling price of the average car? That's what Rambus >is demanding. The average car costs 15 thousand. I was not aware the average computer contained 15 thousand dollars of ram. More like 200 bucks worth. Adjust your market caps accordingly.

To: Dan3 who wrote (46952)	7/11/2000 2:19:04 AM
From: The Prophet	Read Replies (2) \| Respond to of 93625

RMBS is a meanie; RMBS is a meanie. 2% is expensive. Bad RMBS. Bad, bad RMBS.

To: Dan3 who wrote (46952)	7/11/2000 5:44:42 AM
From: Steve Lee	Read Replies (2) \| Respond to of 93625

"Re: he probably collects now between $.5 to $1 per pair of wipers. A far cry from the 20% of the profits made on each vehicle that Rambus's current valuation is based on. What's 2% of the selling price of the average car? That's what Rambus is demanding" If RMBS were looking for 2% of the selling price of a whole computer system with software then your analogy is accurate. As they are only asking for a royalty on the DRAM, the analogy is more like the windshield wiper guy asking for 2% off each set of wipers. With Zeev's estimates of his wiper royalties at $.5 to $1 a set, that would put the cost of a set of wipers at about $37.50 to complete the comparison. Probably about right. So your analogy has confirmed the validity, based on a similar historical example chosen by you, of Rambus's level of royalty. If the DRAM makers cannot choose a profitable line of business and run that business efficiently, thus making small profits, that is their problem. In fact, Rambus is a blessing to them right now. The cost of manufacturing is greater for RDRAM than SDRAM by a lesser margin than the selling price difference. So the advent of RDRAM actually allows them to make MORE profits. Hence the eagerness of manufacturers such as NEC to ramp.