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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

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Jan 9 9:30 AM EST

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To: foundation who wrote (2654)	9/1/2000 7:54:42 AM
From: foundation	Read Replies (2) of 197155

CDMA Phone Makers Frustrated by Qualcomm's Royalty Local manufacturers of CDMA (code division multiple access) mobile phones are increasingly frustrated by the high-handed position that Qualcomm assumes when it comes to royalties. With Qualcomm insisting that there will not be a cut in royalties, foreign producers of other components that are used in the CDMA terminals are also demanding similar treatment. Industry sources said companies like Samsung Electronics and LG Electronics have not been complaining about the 5 percent royalty that they have been paying on all units carrying Qualcomm chips. ``These companies have the production volume and market demand to cope with the 5 percent royalty but now other suppliers like Motorola and Lucent are demanding royalties as well,'' one market analyst said. While Qualcomm's technology is focused mainly on the modem chip that receives and transmit voice and other data but other companies have their specialties in a wide range of other CDMA technologies. ``These companies have apparently been waiting until there is a stable market for CDMA terminals and now that there is, they are playing hard to get,'' the analyst said. With domestic companies exporting more than 10 million terminals, more than half of which head out to the United States, the additional royalties are expected to reach tens of millions of dollars every year. The analyst said LG and Samsung are believed to be in negotiation with the CDMA components suppliers but anything above 8 percent will be difficult to handle. One LG official said his company has agreed to pay Lucent Technology 3 percent in royalties and Motorola is demanding 1.7 percent for terminals with Qualcomm chips and 3.3 percent for those without. ``We are planning to fully utilize our own technologies to reduce royalties but Qualcomm has been standing firm on its position of receiving royalties through 2006-2008,'' one LG official said. Owing to these new developments surrounding royalties, industry analysts are saying that the government should place more emphasis on adopting the asynchronous technology for IMT-2000 (International Mobile Telecommunication). ``If the government hints at the possibility of adopting the European standard for IMT-2000, it will provide domestic companies with a greater leverage in negotiating royalties,'' one analyst said. koreatimes.co.kr

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