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Melody says:
>The bottom line, it seems, is that Gary suggests that the deal makes the royalty issue a wash of sorts for both companies when dealing with each other.

There may be more aspects to this. My (well probably influenced by many on this board and elsewhere) thinking is that maybe QCOM built up the infrastructure division to help build up a network that used CDMA. Once that was well-seeded, that division (not exactly a money maker - bu maybe it can be in someone else's hands) was let go. By ERICY continuing to build infrastructure, they are partly playing QCOM's game for them. They generate demand for CDMA, for the ASICs that QCOM makes and sells, ie they generate revenue for QCOM. That seems like a win for QCOM. Similar thought can be applied to the announced parting with the handset division. Again, QCOM built handset that supported the early CDMA market. Now everybody else wants to build handsets. But why compete with them, when you can sell them all the guts of the handsets (again, QCOM ASICs). In fact, by getting out of the handset business they are even better positioned to sell ASICs to EVERYONE since they are no longer perceived as competitors.

You've gotta wonder in fact whether QCOM even really wants to sell the ASICs if they think they can have someone else make them and pay them royalties. Pretty good profit when you have 0 cost. Or maybe I am going too far here. :-)

BeenFooled
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