|★ PEOPLES ★ AMSTRAD'S ROYALTY SECRET|New Computer Express) ★|
|Amstrad's Royalty Secret|
A London firm of analysts has claimed that Amstrad paid out huge sums of money for the right to use IBM technology.
City analyst Sheppards Research said last week that Alan Sugar may have paid the giant US corporation up to £6 million in royalties - that would be more than the money paid for Sinclair in 1986.
The £6m figure works out as back payments of one per cent of all Amstrad PC sales since the 1512 was launched two years ago Amstrad has declined to confirm or deny that money was paid. Non-disclosure, it says, is part of its agreement with IBM.
Sugar : £6 million pay out? >>
But Sheppards' electronics expert Chris Whitehead is convinced that substantial funds were handed over: "When I spoke to Amstrad about it I felt that they definitely didnt want to talk about it and that they had paid something.”
He added: "When Amstrad do something they usually talk about it but they were very tight lipped." Amstrad's patents deal with IBM was announced in the summer and at the time Amstrad indicated that no money had changed hands. Instead it was trailed as a reciprocal deal whereby both companies would use each other's technology. However it was never clear what IBM would want out of Amstrad.
IBM has long been looking to regain royalties from clone manufacturers for all sales of MS-DOS machines. Last week Mitac was reported to have paid one per cent of all its PC sales.
An Amstrad spokesman told Express: "We have never confirmed any figures."
Industry sources suggest a public admission of royalty payments to IBM would conflict with Amstrad's brash image of doing things its own way.
Meanwhile, Amstrad has responded philosophically to an eight point drop in its share price. This followed large city analyst County NaiWest revising profit predictions for Amstrad downwards.
"It's a volatile market," shrugged the Amstrad spokesman.
Despite their royalty claim Sheppards recommend Amstrad shares as 'quality stock' that should be bought.
New Computer Express (11-1988)