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QCOM in the news this morning at WSJ. While being mindful of Sean's teaching not to watch the news too carefully, I do want to be aware of developments in the marketplace that can change the fundamentals of a company. The question I have for you, Sean, is this: Since QCOM derived 80% of their profit last year from intellectual property licensing (and not sales of their chips), and given the increasing assault on that business model from competitors and regulators around the world, what are the implications for their revenue model going forward? Here's the story link:

I don't think investors are too worried about it because the selling volume keeps declining and that recent news hasn't had that much of an effect. Therefore, the previous move down in the stock likely accounted for the bad news along these lines. Now, about going forward, the waters are muddy on the licensing because we don't know how the Apple lawsuit plays out (for or against them). Also, Qualcomm is challenging this fine too and it sounds like they have a good argument, at least on the amount of the fine. However, I never worry about an $80 billion company that has almost $21 billion in cash. Companies with cash always have options. If they had to redirect their business or if they bought another business, etc., they have options. It's how Microsoft and Intel have survived long after their heyday. They bought other businesses and bought other talent and they were just fine. Why? They were huge and cash rich.