To: Scumbria who wrote (48125 ) 7/28/2000 1:15:20 PM From: blake_paterson Read Replies (1) | Respond to of 93625 scumbria, re: <<If a group of the world's largest companies were meeting to try to figure out how to deal with a very small company that was trying to extract huge royalties from them, what sort of potential strategies do you think might come up in the discussions?>> 1. Sign licenses with the start-up to get a look see at the technology. 2. Create a paper trail (the veracity of which is immaterial) to promote the impression that the technology was already obvious and in the public domain. 3. Create an industry consortium with all sorts of obfuscating missions, whose real job is to promote an alternative, "free" variant of the technology and smash the original version of the technology. 4. Enlist the loudest, most effective PR to create positive spin on the deviant (I mean, variant) technology; you know, evolutionary, costs less, less cap ex required, works better, etc etc.. And trash the start-up's product offering with arguments to the contrary. 5. Create doubt and uncertainty about the start-up's product in OEM buyers, those that design it into systems, the early adopters, etc. 6. Threaten litigation or silly things like anti-trust action against this tiny company. 7. Do whatever it can to depress the company's market cap so as to pressure management into making a mistake. 8. Negotiate with the start-up, en mass and as one, so as to get the royalty fee reduced as much as is possible. Thanks for giving me the opportunity to respond hypothetically to your hypothetical question. BTW, re: "...extract huge royalties from them"..... 1% of cost = "huge"? Perhaps you are not familiar w/ the recent margins of the industry; take a look at the Micron 3Q2000 report, for example: "..the gross margin on semiconductor memory products was 40%.."micron.com I believe that GM's are higher in the other companies, on the order of 50%. The high end public is currently buying product w/ RDRAM inside; its' cost adder is showing NO signs of killing the RDRAM market. The DRAMURAI's apparent greed and propaganda campaign has a much higher likelihood of accomplishing that. Just my speculation, of course. BP