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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Hayden who wrote (69146)	9/24/2007 4:56:22 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 213177

will be caught up in negotialtions over how much of iPhone is phone and how much is other stuff don't bet on it. every other expensive WCDMA-based phone also has lots of gizmos on it that have nothing to do with the radio interface. QCOM will nevertheless charge its very expensive royalty on the whole phone net of whatever offsetting IP the licensee has (in Apple's case, likely none). i am pretty sure this will be confirmed by slacker, who knows what he's talking about on this subject more than just about anyone on SI.

To: Jeff Hayden who wrote (69146)	9/24/2007 5:58:41 PM
From: slacker711	Respond to of 213177

I think any licensing costs for WCDMA from QCOM will be caught up in negotialtions over how much of iPhone is phone and how much is other stuff like web, WiFi, iPod. iPhone is not just a phone. Maybe 50% might be considered phone? I know my use of the iPhone is about 40% phone. Every high-end WCDMA handset has features that are similar to the iPhone, and royalties have always been calculated on the wholesale price of the entire unit. Apple can try and change that, but that would mean years of lawsuits and potential injunctions. FWIW, one additional datapoint....Qualcomm has stated that there is a cap on the wholesale price from which royalties are calculated. My unconfirmed WAG is that the cap is $500....so a 5% rate would result in around a $25 payment even if Apple was actually getting $800 a handset. On the other hand Apple could just say 'To hell with it. We won't bother with WCDMA for a while'. This would be the very definition of cutting off your nose to spite your face. If Apple released an HSDPA version of the iPhone tomorrow and charged $100 more to cover the increased royalty, higher chipset costs, and a higher per unit profit, the HSDPA version would substantially outsell the EDGE version. We would also see analysts racing to raise their estimates for total iPhone shipments in '08. Slacker