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

To: Amots who wrote (79261)	7/27/2008 11:42:00 PM
From: dylan murphy	Respond to of 196577

If Nokia was serious about paying a lower rate AND a lower overall amount on this new deal don't you think they know exactly where that price inflexion point comes into play? Let's say they were paying 4% and now they are paying 2%. They take the up-front payment and subtract out some for lawyer fees they no longer have to pay, tax write offs, and anything else they can rationalize. Patents are given no cash value. So they are left with a number. When the difference between 4% and 2% amounts to that number, they have reached their goal. From that point on they would only be paying 2%. It would seem to be in Nok's best interest to buy as many chip from QCOM as fast as they can in order to get to the point where they are truly paying the lower rate. How long would that take? I doubt it would take 15 years. But I am sure Nok has a good idea when it would happen. At first it doesn't hurt QCOM since they have already been paid. In future years if others go out of business then Nok will be paying 2% for chips that QCOM could have sold to others for 4%. But it will be a bigger market for QCOM so I'm still not sure they ever really get hurt by this deal. Just trying to look at things from Nok's POV. Its easy to tell I don't do this for a living.:)Using logic may not be the right way to look at things when dealing with numbers either. Feel free to point out any big mistake I made.