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To: Art Bechhoefer who wrote (80192)	9/17/2000 10:35:32 AM
From: Uncle Frank	Respond to of 152472

You wrote to Mqurice, >> If Q raised its royalty prices, wouldn't demand go down? Conversely, if Q had lowered its royalty rates, wouldn't that increase demand? Pmfji, Art. Demand for cdma should be relatively inelastic as a function of royalty costs since it contributes a minor one time charge towards the cost of installing and maintaining a cdma system over a period of years. The scenario you posit might be valid if consumers were in charge of choosing the air interface based on hand set costs, but since the carriers make that decision based on comparative roi, the difference between a 5% and a 10% royalty model would have far less weight than bandwidth/features considerations. jmho uf