Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Charles R who wrote (16924)	10/31/2000 1:22:29 PM
From: AK2004	Read Replies (1) \| Respond to of 275872

Charles royalty based models usually do not work unless eventual buy-out. Rambus grew way too much for any buy-out possibility given the risk. the 1st is very high probability. Even if there was no prior art rambus participated in standard setting. rambus or other players do not care if it is 1% or 2% - cost of doing business which does not add much to overall price. I believe that nec just did not want to bother. Other companies just do not want to open the way for me-too-Rambus to follow. c)is not likely in the next few months :-)) - reliable tech projection horizon d)that would be ddr? Regards -Albert

To: Charles R who wrote (16924)	10/31/2000 2:57:31 PM
From: Petz	Read Replies (2) \| Respond to of 275872

Chuck, <Royalty based models will work and are the wave of the future> Can you give an example? Royalty based models can work for drug companies but there is a big difference between a drug startup and Rambus Inc. Drug companies don't rely on one drug and then hire 5 times as many lawyers as researchers. They continue to develop new products. Any drug startup that doesn't develop at least one new product a year is doomed. The last time I looked at Rambus' financials, I couldn't believe how microscopic their R&D budget is! Would you believe $3.3 million in latest quarter, and only 12% of sales? What's that, a staff of 80 perhaps? Their MG&A budget (translation: LAWYERS) is twice as much as R&D. Compare that to, say, SSTI (Silicon Storage Technology), which as half the market cap (even after today) but nearly four times as much R&D, $12M. Compare it to Alza Pharmaceuticals, which has not quite twice the market cap, as of right now. Their R&D was $47.9 million (8 times larger, adjusted for market cap) and 19% of sales. But Alza is an established company! A startup drug company with a PE like Rambus would be expected to have R&D of 25% of sales or more. They would be expected to have several products in the pipeline and several under development. Without developing something new and better than RDRAM, Rambus' royalty stream from RDRAM will be gone in six years. Even if Rambus' patents are held valid for SDRAM and DDR, that royalty stream will last less than two years because DDR2 will be ramping up in a year. Can you point to any high-tech successful "IP companies?" I agree it should be possible IF they continue to develop new products, I just don't know of any. Petz