The New Qualcomm - a S&P500 company Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The New Qualcomm - a S&P500 company

QCOM 172.22

-0.6%

9:42 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: carranza2 who wrote (13289)	6/27/2000 2:57:00 AM
From: Bux	Read Replies (1) of 13582

Aha! The reason for Nokia's backdoor ASIC operation is suddenly very clear to me. Nokia feels they have important W-CDMA IPR and don't want to license Qualcomm's 3G IPR until (and if) they can demonstrate W-CDMA works and is a competitive threat to Qualcomm's 3G products and thereby receive a more favorable cross-licensing agreement. If Nokia cannot demonstrate a competitive threat from W-CDMA, then Qualcomm will only need to offer the same terms as all other manufacturers have, take it or leave it, they wouldn't need low rates for W-CDMA. If Nokia does demonstrate a competitive threat and they do so sooner rather than later, Qualcomm will need to share more of their royalties with Nokia in order to receive a favorable cross-licensing deal with Nokia for W-CDMA. This appears to be a game between Nokia and Qualcomm, Nokia trying to demonstrate that W-CDMA will be competitive soon meaning that it will be important for Qualcomm to have a favorable cross-licensing deal with Nokia for W-CDMA thus encouraging Qualcomm to grant Nokia favorable terms for CDMA2000 which they already know will be an important market. This also reinforces my belief that Nokia knows the lasting importance of the CDMA2000 market or else they would not be willing to use the low-profit (back-door) approach while they wait for a more favorable agreement for CDMA2000. First to market with an adequate lead is everything. I think I know what I.J. was speaking of when he said they were not on "telecom time" but "internet time." It appears Qualcomm is content to allow Nokia to use Qualcomm ASIC's in the meantime. The importance of this race to market also reinforces my belief that Nokia is just using IDC as a quick and easy source of 150 wireless engineers, damn the $70 million. It's probably cheaper than trying to lure experienced engineers away for the final W-CDMA ASIC development effort and then paying severance etc. Besides, those engineers were probably wondering what they were going to work on after the failed B-CDMA effort. IDC gets some much needed cash flow and IDC's management could cash in some of their shares at a high price when greedy investors bid the price up based upon little more than being in the midst of it all. Of course the lawyer-speak "calculator with a lot of digits" and "engine and transmission" didn't hurt the share price one bit. In any case, I would much rather be in Qualcomm's shoes (or shares as the case may be) than Nokia's since Nokia's actions have reinforced my belief that CDMA2000 is an important market for years to come and all Nokia can do is hope to leverage their W-CDMA technology to receive more favorable terms. In the mean-time, other handset manufacturers are gaining experience and emulating the Nokia look and feel, making any cross-licensing agreement Nokia might receive only impact Qualcomm royalties to the degree of Nokia's small CDMA market share. Nokia had a good thing going but I'm afraid they have blown their handset dominance going forward by allowing the Asian manufacturers a year or two to catch-up and emulate. Nokia will really be feeling the pressure next year with regard to handset margins and market share even with a favorable cross-licensing deal with Qualcomm. Bux

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next