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

To: Sun Tzu who wrote (72831)	5/14/2001 2:27:14 PM
From: IceShark	Respond to of 93625

Standard operating procedure for royalties is based off actual sales revenue of the product. Product sold, not product manufactured and placed into inventory (1). Given the cyclical pricing nature of memory and how thin fully cost loaded margins can get (like negative), you can see why the DRAM manufacturers are loath to enter into a 3.5% of gross sales royalty, or any % for that matter as 1% could wipe out profits for the year, and certainly cash flow. There is a reason for all this cross licensing. Took a long time to get this steam roller going, but I think Rambo overplayed their hand and are dead ducks. Had they stuck to RDRAM they would have walked on. But as it became apparent that RDRAM wasn't going to take over the world they veered off course and into a nuclear war they are bound to lose. (1) And memory chips are easy to figure as opposed to a product that is a part of a larger, much more expensive product, and the games that can be played there. Good example would be the infamous intermittent auto windshield wiper patent.