Re: "damage" to QCOM from Nokia's actions. Very hard to prove, and because of that, it is not likely that a court would rule in favor of QCOM. Unless QCOM could come up with some written documentation on a concerted attempt by Nokia and perhaps others, it would be difficult to prove intent to do harm.
The best leverage that QCOM has, in my view, is to prevent Nokia from using QCOM IP. Nokia now uses that IP indiscriminately and probably cannot sell a handset suitable for WCDMA without using at least some QCOM IP. It is the same leverage that QCOM has ultimately with BRCM, which can't sell ANY WCDMA chips without a license from QCOM.
NOK and BRCM, and possibly a few others are hoping that QCOM will cave in and settle for an industry wide royalty rate amounting to scarcely more than peanuts. The problem with their approach is that QCOM has such a strong cash flow that it can continue to maintain its rights to existing (if not more, thank you Maurice) royalties than it gets now. I'm sure the opposition hopes that QCOM will continue to be plagued by inept legal counsel, but this problem as well seems to be in the past.
Then there is the wild card--circumventing WCDMA by pushing alternatives such as WiMAX and LTE. The problem here is the time it takes to get a new system established in the marketplace, not to mention getting enough bugs worked out so that it is marketable. Even though WiMAX appears to be a reasonably competitive alternative system, it's not clear to me that it would be a GENERAL solution to high speed communication, instead of being useful only under certain conditions (relatively low traffic and low density areas where wider antenna spacing is feasible).
Companies and shareholders alike have to look at near term as well as long term consequences connected with these choices. If we are looking ahead for the next two or three years, given the rapidly increasing demand for high speed wireless data, I think it is becoming more and more clear that one cannot avoid using either CDMA2000 or WCDMA. Even TD-SCDMA remains problematic. Also, the tactics employed by Nokia and others to slow down the adoption of WCDMA are now beginning to fail. Service providers have spent so much money on new spectrum allocated to WCDMA that they need to ramp up WCDMA service in order to generate positive cash flow and get a reasonable return on their investment.
We are now in about the fifth or sixth round of a very high stakes poker game, in which it appears that QCOM holds the winning hand. How long can the others bluff before being called?
Art |
