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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: tradeyourstocks who wrote (5268)	12/5/2000 4:38:57 PM
From: alburk	Read Replies (1) \| Respond to of 197207

microe How does this agreement differ from your original expectations of the SPINCO strategy? Thanks Andy

To: tradeyourstocks who wrote (5268)	12/6/2000 12:32:10 AM
From: EJhonsa	Read Replies (1) \| Respond to of 197207

A couple of comments regarding the TI deal: 1. It's quite possible that TI has, arguably, the world's most valuable DSP-related IPR portfolio, and one of the most valuable portfolios of any semiconductor manufacturer in existence. I'm sure that, to a great extent, the company's current position in the DSP market can be attributed to it. The fact that a competitor such as QCT's being given access to TI's entire patent portfolio, as well as any patents filed by the company over the next five years, is by no means a minor concession on the part of the former, and I think it's highly unlikely that TI would ever enter into such a deal with competitors such as Lucent, Motorola, Intel, etc. 2. It appears that TI currently isn't selling end-to-end GSM/TDMA baseband chipset solutions to Nokia and Ericsson. Rather, they're only selling general-purpose DSP cores and SoC platforms, which Nokia and Ericsson then work with to develop the full-fledged baseband chipsets that go into their handsets. Likewise, I'd be surprised to see Nokia, Ericsson, and TI's Japanese customers completely outsource W-CDMA ASIC development to TI right from the start, even if they happen to buy DSP/SoC products from them. For this reason, it's unlikely that the company will end up paying royalties on a large % of its chipset sales to handset vendors, regardless of the terms of the deal. 3. Assuming that, if no cross-licensing agreement happened to be signed, and TI had to pay the going rate for a license, it should be noted that, for every CDMA handset sold by a licensee paying 4-5.5%, TI would probably have to sell 6-10 ASICs in order to provide an equivalent effect on Qualcomm's bottom line. In the end, I'm still curious as to why, if QCT/Spinco is indeed being given "essential" CDMA-related patents along with the spinoff, Qualcomm found it necessary to strike a deal now, rather than opt to wait a few months and thus not compromise the selling price of its "crown jewels". Perhaps their rationale was similar to that of Thomas Jefferson, who, in 1803, abandoned his constitutionalist principles in order to buy Louisiana from Napoleon without first getting approval from Congress, so as to get the deal done before the midget started having second thoughts. Likeiwse, if the company held off until February, they might've been able to get their 5%; but by then, TI might've found Qualcomm's IPR-related demands to be excessive, and the latter may have lost out on any chance to obtain the former's own crown jewels. Still, I'll be more than a bit nervous if similar deals are signed with Nokia, Siemens, and Alcatel. Eric