This is the kind of crappy analysis that is losing money for a lot of people.
Look at how effortlessly his questionable assertions flow from his flawed assumptions.
QUALCOMM will be receiving royalties on both W-CDMA and cmda2000 at the same rate -- no difference
First of all, CDMAOne was designed to layer over an analog network. CDMA2000 was designed to layer over a CDMAOne network. WCDMA, on the other hand, is being designed to layer over a TDMA/GSM network, which, in turn, was designed to layer over an analog network. WCDMA will have significant TDMA/GSM IPRs involved. QCOM has no TDMA/GSM IPRs and even QCOM has CONCEDED that it will secure the necessary TDMA/GSM IPRs at the right time.
Why does this guy keep on ignoring the facts?
Second, it's a free world. The vendors who control the specifications for WCDMA are free to add 3.5G/4G hooks and extensions into the highly modular and extensible WCDMA platform.
The burden of inter-system compatibility rests on the proprietor of the niche platform, QCOM, not the rest of the industry. In order to accomplish that, they have to cross-license not only the relevant TDMA/GSM patents, but also whatever 3.5G and 4G technical hooks and advances will be included in the different phases of WCDMA. Note that Lucent, Ericsson and IDCC have all asserted IPRs under IS-95 to protect their rights under CDMA2000.
Ericsson (ERICY, $21, Buy) has already signed a royalty-bearing license for W-CDMA at the same royalty rate as the company's current generation CDMA license; and Ericsson was one of the original developers of W-CDMA.
This is an inexcusable, bald-faced half-truth.
First of all, Ericsson does not control all the patents for WCDMA - on the network side or on the handset side. By most accounts, Ericsson is part of the vital consensus behind the 3G Patent Platform which is using the packaged GSM patents as a club to enforce its caps on royalties (around 5%) for most WCDMA IPR holders. Note that the 3G Patent Platform requires one-to-one licensing deals
Second, Roberts is deliberately distorting the Ericsson-QCOM cross-licensing agreement which is ROYALTY-BEARING ON BOTH SIDES. Again, note that Ericsson has asserted its rights to IS-95 (CDMAOne) IPRs and CDMA2000 layers over CDMAOne. Before I excerpt the actual statement from QCOM's 10K405, it is worth noting also that Ericsson has publicly declared that "Qualcomm will NOT get rich off ERICY" and that it will be entitled to net royalty payments under the deal. THIS only makes sense if you view WCDMA as a platform that will accomodate many technical advancements, many of which will be non-QCOM and non-CDMA, in the years to come. A genuine possibility, yes?
From the QCOM 10K:
On May 24,1999, QUALCOMM sold certain assets related to the Company's terrestrial CDMA wireless infrastructure business to Ericsson pursuant to the March 24, 1999 Asset Purchase Agreement, as amended. The Company and Ericsson also entered into various license and settlement agreements in connection therewith. Under the Agreement,
(a) QUALCOMM agreed to sell certain assets relating to its terrestrial CDMA wireless infrastructure business to Ericsson in exchange for cash and the assumption of certain liabilities,
(b) QUALCOMM and Ericsson agreed to jointly support a single worldwide CDMA standard with three optional modes for the next generation of wireless communications, and
(c) all of the existing litigation between the companies was settled, and the companies entered into royalty-bearing cross-licenses for their respective CDMA patent portfolios, including cdmaOne, WCDMA and cdma2000. THE CROSS-LICENSES ARE ROYALTY BEARING FOR CDMA SUBSCRIBER UNITS SOLD BY ERICSSON AND QUALCOMM. QUALCOMM also will receive rights to sublicense certain Ericsson patents, including the patents asserted in the litigation, to QUALCOMM's chipset customers......
.....As part of the Agreements, QUALCOMM and Ericsson each committed to the ITU and to other standards bodies to license their essential patents for the single CDMA standard or any of its modes to the rest of the industry on a fair and reasonable basis free from unfair discrimination. On the Closing Date, each of the companies notified the ITU and other relevant standards bodies that ANY INTELLECTUAL PROPERTY RIGHTS BLOCKING PREVIOUSLY IN FORCE HAVE BEEN WITHDRAWN.
Since blocking is not an option for either ERICY or QCOM, why is Roberts still peddling the cheap and obvious posturing line that royalty rates for CDMA2000 and WCDMA will be the same? You don't believe me? Why is the mighty QCOM doing the limbo rock (lower, Lower, LOWER) over there in South Korea after basically folding in China?
Again, QCOM does not have any TDMA/GSM patents and it is excluded from the 3GPP so it is not part of the deliberations on what kind of 3.5G and 4G hooks and extensions will be included in the WCDMA specifications that will be updated yearly.
Finally, based on our discussions with Nokia engineers, we believe it is only a matter of time before Nokia extends is current generation licensing agreement with QUALCOMM to include W-CDMA.
His best Gilder imitation. LOL. Remember Gilder's near-breathless reference to NEC engineers who "confirmed" that Docomo is indeed using QCOM's technology? I believe that unverifiable inside reference was published after ATT absolutely pilloried him for his gratuitious slam on AWE on the eve of its IPO.
Save the wearing-of-the-heart-on-the-sleeve-for-one-stock routine for the discovery of the Grand Unification Theory, guys. |
