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Technology Stocks : The New Qualcomm - a S&P500 company
QCOM 166.81-4.1%Nov 17 3:59 PM EST
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To: carranza2 who wrote (13009)6/23/2000 12:30:00 PM
From: Bux  Read Replies (2) of 13582
 
I don't think it's as simple as a Nokia capitulation or not. It appears that Nokia is hedging their CDMA ASIC development efforts. With this arrangement they can participate in the growth of the CDMA market in an indirect way while they continue to delay signing on with Qualcomm. This could help "keep their foot in the door" while trying to figure out how to best proceed. Nokia's CDMA profit will be lower than if they signed directly with Qualcomm but Qualcomm would receive the chip sales and usual royalties and Nokia would be able to have a presence in markets (1X and HDR) that they couldn't otherwise participate in. It still doesn't explain Nokia's reluctance to simply license from Qualcomm, perhaps Nokia is waiting to see if their 1X and HDR development efforts will be able to be competitive with Qualcomm ASICS. If so, Nokia would negotiate a license to produce 3G ASIC's, if not, Nokia would negotiate a license to purchase ASIC's from Qualcomm. This agreement is just a stop-gap measure to delay the inevitable decision Nokia must make but it certainly gives Qualcomm the edge in future negotiations since the pass-through agreement provides Qualcomm with their usual royalties and ASIC sales.

All just my opinion

Bux
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