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Technology Stocks : Nokia (NOK)

NOK 6.070

-1.3%

3:59 PM EST

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To: A.L. Reagan who wrote (3926)	4/1/2000 10:28:00 AM
From: tero kuittinen	Read Replies (1) of 34857

I think it's fait to say that Qualcomm has the "wheel and axis" patents for W-CDMA. But what this means for how the IPR are distributed isn't necessarily clear. Can the Cro Magnon who invented the wheel claim to "own" Ferrari? I think the internal combustion engine, transmission etc. are pretty important features as well. The cross-licensing is an obvious way to solve the W-CDMA dilemma - but that may mean that the net effect on Nokia is clear only after an agreement has been reached. Who cares if company A has to pay a 3% licensing fee - if it gets a 2% industry-wide licensing fee in return? The net effect can be a wash-out or it can be actually a positive. So saying that Qualcomm gets the same fee for cdma2000 sales as it gets for W-CDMA sales can be misleading if Qualcomm ends up paying other companies W-CDMA fees for its chipset products. It's empty sophistry to talk about "different CDMA flavors" if W-CDMA IPR is spread across more companies than the cdma2000 IPR. Maybe Q receives the same cut from both; but that does not mean it pays out the same amount for both. If that's the case, the net effect of CDMA2000 and W-CDMA is very different for several companies. For example; I don't think that Nokia gets one shiny penny for any cdma2000 equipment licensing fees. But Nokia probably will get something out of W-CDMA sales. So the issue is not trivial for Nokia - and the standards are not necessarily interchangeable. We have to wait and see. I have a hard time seeing cdma2000 and W-CDMA as "identical" standards if their IPR structures are different. And maybe Motorola does not have any W-CDMA IPR - but I don't see why Motorola hasn't announced their W-CDMA licensing decision if they already have made one. All it would have taken is one sentence in the press release. I think Nokia has stated several times that they possess W-CDMA IPR and are seeking a "fair" solution. NTT-DoCoMo has made some very pointed comments about the importance of reaching a "fair" solution. I don't know exactly how to interpret these comments; but it may be a code for recognizing the contribution of several companies. After all - how can the Qualcomm licensing income be exactly the same for a standard it designed and a standard that was a collaboration between NTT-DoCoMo, Ericsson and Nokia? Now - you would think that the patent hassle would be a major plus for cdma2000. That's what makes the Asian defections so puzzling. Why are SK Telecom and IDO so reluctant to back cdma2000 unequivocally? What rough beast slouches towards Sprint, waiting to be born? I'm not too surprised that San Diego Tribune or Forbes are unwilling to address the complexity of the situation. It does not fit their simplistic Candyland image of the telecom industry revolving around the California-Michigan awis. Tero

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