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

To: JMD who wrote (3404)	3/30/1998 10:45:00 PM
From: Guy Peter Cordaro	Read Replies (1) \| Respond to of 93625

What does everyone think of this debate? Regardless of the price of a core, there's considerable debate over how it should be sold. Many IP providers charge royalties, but that's a controversial approach. Tom Anderson, director of engineering for the Virtual Chips unit of Phoenix Technologies (San Jose), commented that customers dislike royalties because they want an "engineer to engineer" business. Mark Templeton, chief executive of Artisan Components (Sunnyvale, Calif.), warned of the pitfalls of "stacking" royalties. If every IP vendor demands a percentage of the chip's selling price, the chip maker will end up making no money on the product, he said. "Two years from now, there's going to be 30 or 40 pieces of IP on a chip. We can't all get a percentage of the selling price," he said. But Geoff Tate, chief executive of Rambus (Mountain View), defended his company's use of royalties, noting that Rambus contributes $20 in value to a Nintendo 64 system but receives less than $1.