Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 151.59

-0.4%

Jan 30 9:30 AM EST

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To: JGoren who wrote (36177)	7/20/1999 3:28:00 PM
From: quidditch	Read Replies (1) of 152472

Infringement suit: another strategem: JGoren, remedies sought by Q may well include termination by Q! of MOT's licenses (don't know what Pantech is) and I assume that the licenses have severability clauses. But here's a take: if MOT is terminated, this reduces (possibly underreported) handset/ASIC sales and thus royalties; MOT is a major vendor in volume. As a commercial matter, Q probably could not ramp up itself in the near or medium term to the volumes now executed by MOT in addition to the monthly volumes Q now has--it is capacity constrained; thus the threat of termination is the hammer to improve the terms to Q of any existing, or amended and restated, license. MOT would be strangled without CDMA handset sales. As I recall, in the SSB research piece, MOT has the low, legacy royalty rate dating back to when Q! had no bargaining power. As a commercial matter, it won't be as simple or transparent as upping the rate (similar to ERICY cloaking its deal in terms of reciprocity). But if Q!'s case has merit, termination is not what it will be after, IMHO. Regards. Steven

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