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

To: barty who wrote (52751)	6/23/2006 10:08:35 AM
From: Dash of Reality	Read Replies (1) \| Respond to of 196996

Qcom can't recognise revenue unless they have a licensing agreement in place. Simple as that. Beyond April '07 their P&L gets hit unless they can settle with Noks. They can threaten GSM lawsuits or US WCDMA injunctions all they want, but the point is they're the ones under pressure here. This simply is not true. Yes, they would be required to recognize revenue. The only requirement to recognize revenue is that it be measurable and probable. Both requirements are met. Because Nokia is only disputing the royalty rate, they acknowledge their requirement to pay some rate. So, therefore some amount of revenue to Qualcomm is probable. They have most likely, in negotiations, already offered to pay Qualcomm a reduced rate. Therefore, a minimum amount of revenue is measurable. For example if Nokia currently pays 5% royalty and offered to pay 3% royalty. Qualcomm would accrue revenue at a minimum of 3% royalty. The only reason Qualcomm is under pressure to settle this, is because of the deterioration of their stock price. Reducing their royalty is not something they will take lightly as it impacts their contracts with all of their licensees. DoR