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

To: manalagi who wrote (68067)	8/21/2007 9:05:02 AM
From: slacker711	Read Replies (1) \| Respond to of 197452

Patents have limited life even if they are renewed. Should QCOM split the company, will the licensing department be an attractive investment since they have to keep inventing new patents. How far in the future can this entity rely its revenues from royalties? A large portion of Q's current valuation is based on those royalties and they are going to face the same problem regardless of whether they perform a spinoff. So the challenge is the same, continuing to innovate well ahead of the rest of the market or watch the royalty stream eventually whither. I would imagine that QTL would have to start spending on R&D that doesnt currently show up in their 90% margins. I would also imagine that they would be aggressive on the IP acquisiton front as they could look to bolster their portfolio across a wider spectrum of technologies. OTOH, a stand-alone QCT would likely have been far more aggressive in the prosecution of the GPRS/EDGE patents as well as potential H.264 licensing revenue. They would also have the possibility of a substantial boost to their revenue from a full 5% royalty rate from Nokia. One way to look at this, do you think QTL will be able to command higher OFDM royalties as a stand-alone entity or in the current setup? It seems to me that losing the cross-license deals would allow QTL a much better chance to get substantial OFDM royalties. Slacker