For example, does Samsung now buy an ASIC from Qualcomm and *in addition*, pay a royalty to Qualcomm for use of the technology? In the future, if Nokia decides to buy ASIC's from Spinco, will they pay Spinco for the chip and also pay Qualcomm a royalty for the right to use CDMA technology in the phone?
I am taking a slight leap of faith here, but after reviewing my notes, here is what I conclude.
Currently, when a mfgr buys ASICS from QCOM, they pay QCOM no royalty fee. When a mfgr builds its own ASICS, they pay QCOM a royalty fee. The essence of this does not change in the future. If a mfgr buys ASICS from SPINCO, they will pay no royalty fees to anyone, including GSM IPR holders. If a mfgr builds ASICS, they will pay QCOM and all others who own the IPR royalty fees.
Here is an excerpt from the call:
Bear Stearns:
Change arrangement with vendors with ERICY or LU (favored nations)?
Answer:
Spinning will not change existing relationships with licensees. Licensees will remain as licensees after spin.
Question:
Different royalty rate for those who used chip sets versus those that did not?
No difference, but some advantages from using QCOM ASICS, will work to make that continue.
Question:
WIll this reduce QCOM royalties?
Answer:
No, be careful to have no impact. Provides assurance that QCOM will have no need for cross licensing. Will continue to attain CDMA value.
Now, if I made the wrong assumption and buyers of ASICS pay a royalty fee as well, then my conclusions are probably wrong. Anyone? Anyone? Anyone? |
