True entrepreneurs will go to any length to get their companies off the ground. And, they're known for accepting the consequences of the risks they take. Some businesses never make it to launch, never bring in a dime, never lead to that killer IPO. In even rarer cases, these adventures can put two people behind the defendants' table on charges of corporate espionage. Lan Lee, an American, and Yuefei Ge, a Chinese citizen, allegedly swiped computer chip blueprints and tried to gain Chinese government support for a startup using these illicit goods. Now, they could face up to 65 years on charges of corporate espionage.

It took three days but I finally received a comment in regard to the Qualcomm Inc. (NASDAQ: QCOM) chip controversy from a reader who had the brains to understand it is much better to educate us than it is to vainly call us names.

A reader who identified himself as tomtjm made a couple critical points, and I'm taking him by his words that he knows what he's talking about. Because tomtjm was so kind as to offer me his input free from derogatory jargon, he has thus earned the right to have his views brought right up here to the front page.

According to tomtjm, the patent issue which instigated the Qualcomm import ban resides not in the chip itself or its surrounding hardware but it is based upon the way in which the chip's accompanying software makes the chip function. The software gives "instructions" to the chip in regard to the ways of conserving power when the host unit is out of signal range.

To sum it up, tomtjm puts it this way: "Its not the phone... or the chip but the way they are used that's in violation... that function can be changed with a patch or work-around or whatever you want to call it."

If tomtjm is right, and I do believe he may be, then it should be a fairly simple matter for Qualcomm to put things right. If the QCOM chip can be made "acceptable" by simply rewriting its software instructions, then I think Qualcomm should send about sixteen attorneys into the offices of the ITC with a letter of corrective intent and a token payment for "punitive damages" and perhaps then we can put this whole matter behind us.

It just may be time for Broadcom Corp. (NASDAQ: BRCM) to "suck it up". There are a lot of people watching...

Gary E. Sattler holds no positions in any of the above mentioned companies.

I've heard of a patch for a tire, a patch on your jacket, a patch over your eye and I've heard of software patches, but a patch for a chip? That's a new one on me!

According to a story issued by Reuters, Sprint Nextel Corp. (NYSE: S) is using a software patch as a work-around to bypass the ITC ban on imports of mobile phones using a Qualcomm Inc. (NASDAQ: QCOM) chip that allegedly infringes on a Broadcom Corp. (NASDAQ: BRCM) technology patent. According to the way the story reads, it would seem that Sprint is assuming a lot of blue sky scenarios for itself. The comment by Sprint product manager Brita Horton, smacks of "in your face" corporate complacency. Brita Horton said that Sprint is unaffected by the ban and can bring out as many new devices as it wants. She bases the company's attitude upon a software "update" received from Qualcomm, which the chip maker itself concedes, would not be a guaranteed solution.

Additionally, there's no word from Verizon Wireless (NYSE: VZ) or Vodafone Group (London: VOD) confirming that those companies have also received software patches or have considered another work-around. Sine both companies are to be as deeply affected as Sprint by the import ban, one might hazard to suppose that both companies would quickly jump on a patch if it truly were a viable solution.

I'm sitting here thinking that Sprint just might be running a serious gambit right now in the form of a patch with dubious application suitability. The whole situation hints at the kind of thing you've seen when a kid plays one parent against the other:

" Yeah Dad, Mom said it would be fine!"

The International Trade Commission (ITC) has banned imports of some cell phones containing chip technology from Qualcomm (NASDAQ: QCOM). The ITC has said that the ban covers cell phones that infringe on a patent held by Broadcom (NASDAQ: BRCM) and that were imported for sale after June 7. The majority of the cell phone import world is up in arms, claiming that the ban will do irreparable harm to the American consumer. Frankly, those that choose to infringe on patents shouldn't be importing technology they aren't ready to sit on when discovered.

James Gerace, spokesman for Verizon Wireless, claims that the ban "essentially attempts to freeze innovation in cell phones." A more accurate interpretation would be that the ban seeks to freeze piracy that circumvents innovation. A Red Herring article says that Sprint Nextel (NYSE: S) has openly declared that it expects to sell 5 million phones this year that contain the infringing technology. That's a pretty bold statement by Sprint, and in light of the current ban, I think it's a pretty stupid statement also. That would be similar to me stopping at the local police station to tell them I plan on driving over the speed limit for 500 miles this year.

AT&T (NYSE: T) doesn't seem to care much about the cell phone ban. It has plenty of handsets available that don't contain the infringing chips. AT&T thought ahead and based the majority of its offering on a different technology. Might we call that decision prudent?

Meanwhile, as the pirates cry and whine about appeals and a stay of execution, Broadcom has eloquently made clear that it will consider discussion about licensing of the patent.

Is VeriChip (NASDAQ: CHIP) ready for a massive breakout? I sure think so. Put aside for a moment the vast and potentially divisive implications of the technology and look at it in a strictly business sense. VeriChip offers technology that is absolutely bursting with potential. The chip, implanted just beneath the skin on a subject's arm, is dormant until scanned using a reader to extract the contained data. The chip costs about $200 to install, plus between $20 and $80 annually, depending on the amount of information on it.

Pets and farm animals are already being chipped as a means of loss prevention and for quick identification. Now volunteer Alzheimer's patients can elect to be chipped to facilitate location, identification and provision of medical information in the event that they wander off or are otherwise separated from guardians or loved ones. Patients with certain chronic life threatening diseases are being solicited as subjects for the device and there are rumors afloat in the UK that soon parents will be solicited to offer up their children to the technology. Yet to be approved by insurance companies as a covered procedure, the concept is still relatively new for use in people but based on the ongoing push by the company and its placement of chip readers in the hands of doctors, insurance company approval is strictly a matter of time.

MAJOR PAPERS:

• General Electric Company (NYSE: GE) is near a deal to sell its plastics division to Saudi Basic Industries for $11B, reported the Wall Street Journal (subscription required).
• Anheuser-Busch Companies Inc (NYSE: BUD) has stopped making its Spykes malt beverage amid poor sales and criticism that it was marketing to underage drinkers, reported the Wall Street Journal.

• According to the Telegraph, citing Cadbury-Schweppes ADS (NYSE: CSG), two rival private-equity groups are preparing to bid for the U.S. beverages arm of the company, with bids in the GBP8B range.
• The Times of India reported that Citigroup Inc (NYSE: C) is putting its captive business process outsourcing arm, which could be worth between $1B-$1.5B, on the block.
• BusinessWeek's "Inside Wall Street" column focused on OfficeMax Incorporated (NYSE: OMX), Verichip Corporation (NASDAQ: CHIP) and Morton's Restaurant Group (NYSE: MRT):
  
• Office Max may be a target for Staples Inc (NASDAQ: SPLS) or Office Depot Inc (NYSE: ODP).
  
• Verichip, a maker of RFID chips, is starting to get attention on Wall Street.
  
• Morton's is being helped by boardroom business being conducted at the upscale steakhouse.

Well I was right on this one -- I was expecting Intel Corp. (NASDAQ: INTC) to make $0.22 a share and -- after a reversal of previously accrued taxes which boosted earnings by 5 cents a share -- Intel met analysts' expectations.

While Brian White is providing the details of the conference call, here are some of the highlights. Intel first-quarter profit rose 19% and revenue slid at a slower pace than last year. Specifically, Intel's net income increased to $1.61 billion, or 27 cents a share, from $1.36 billion, or 23 cents, a year earlier. Revenue slipped 1% to $8.85 billion, following a 9% drop last year.

Intel beat its gross margin forecast -- it made 50.1% and forecast 49%. And it predicts a 48% margin in the future -- an uncomfortable drop.

But investors seem to like the results. Shares were up 1.4% during trading today and rose another 2% after-hours.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Intel.

Intel Corp. (NASDAQ: INTC) plans to cut prices on a number of its chips on April 22. Some prices will drop as much as $100-200 per unit. High inventories have already driven Advanced Micro Devices Inc. (NYSE: AMD) to drop prices on some processors by 30-35%.

The difference between the two companies is that AMD cannot afford to see its margins squeezed any further. Over the course of the last three years, AMD has been able to take 25% of the processor market for servers and PCs. As Intel introduced more competitive products, however, AMD has had to rely on price as its sole weapon in keeping its piece of the pie.

The toll on AMD is clear in the stock price. AMD shares had peaked at over $42 in early 2006 as investors became euphoric about its progress vis-a-vis Intel. Yet, the financial cost of staying in the game against a much larger company became clear as each quarter passed and AMD shares dropped below $13, where they trade today.

Investors are concerned about Intel's costs of competition as well. Still, while INTC stock is flat over the last year, AMD shares are off over 60%.

There is also talk about AMD running short on cash. It spent $5.6 billion last year to buy graphics chip firm ATI Technologies. Forbes recently published a story saying AMD may be so short on cash that it will have to go to the capital markets to improve its balance sheet.

All roads point to a very bad year for AMD. If Intel is now cutting prices to keep market share as well, it is hard to say where the bottom is.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MOST NOTEWORTHY:

• Merriman initiated Callaway Golf Co (NYSE: ELY) with a Buy rating and believes new management could get the company back on track.
  

• Genentech (NYSE:DNA) was initiated at Prudential with a Neutral rating and $92 target. The firm believes the lack of a new product launch before 2010 is a concern for long-term growth.

• American Technology believes shares of LSI Logic (NYSE: LSI) are undervalued, initiating the company with a Buy rating and $13 target, given synergies and revenue opportunities from the merger with Agere Systems, Inc (AGR).

• Bank of America initiated Evergreen Solar Inc (NASDAQ: ESLR) with a Sell rating and $8 target to reflect the lack of visibility on its growth, which puts the company at a competitive disadvantage.

• Salary.com, Inc (NASDAQ: SLRY) was initiated at Pacific Crest and Wachovia with an Outperform rating and at Thomas Weisel with an Overweight rating.

• Prudential started Gilead Sciences, Inc (NASDAQ: GILD) with an Overweight rating and $90 target.

• BMO initiated Smithfield Foods, Inc (NYSE: SFD) with with an Outperform rating and $36 target.

• Kaufman Brothers started VeriChip Corp (NASDAQ: CHIP) with a Buy rating, believing the company's growth position is compelling given its patented, FDA-approved microchip that can be implanted into humans for a variety of applications.

• Citigroup started Amgen, Inc (NASDAQ: AMGN) with a Hold rating and $64 target.