I guess QCOM really do not have to worry about that ruling at all according to the article. QCOM has not sold meaningful chips or phones to North Korea just yet. Does he really know what he is talking about? Anybody knows his email address. Another industry watcher does not what he write.
Monday December 11, 11:12 am Eastern Time
Forbes.com
Focus On The Forbes 500s: Qualcomm
By Matthew Herper
Qualcomm said today it must share certain royalties from the sale of cellular phone technologies in North Korea, as a result of an international arbitration panel ruling that dilutes its royalty revenue there, and possibly elsewhere.
The ruling will cost San Diego-based Qualcomm (Nasdaq: QCOM - news) $80 million for the first fiscal quarter 2001 and about $4 million in every future quarter. The money will be used to pay royalties to the Korean Electronics and Telecommunications Research Institute, which the International Court of Arbitration (ICA) of the International Chamber of Commerce said Qualcomm had been stiffing when Korean sales of its code division multiple access (CDMA) technology were made.
The payments won't break the bank for Qualcomm, which had revenue of $3 billion in 1999. But the ruling calls into question the strength of Qualcomm's patents on CDMA, now a standard for digital communications. Because of those patents, giants like Nokia (NYSE: NOK - news), Motorola (NYSE: MOT - news) and Ericsson (Nasdaq: ERICY - news) already pay royalties to Qualcomm on their cell phones.
In July, Prudential Securities telecom analyst Pete Peterson told Forbes.com he estimates that Qualcomm earns about 4% of the price of every cell phone sold. Qualcomm, however, insists this ruling will not impact its future ability to collect royalties on CDMA.
``While we are disappointed by the ICA's decision, we continue to look forward to receiving strong royalty revenue from sales of CDMA equipment in Korea,'' Louis Lupin, senior vice president and general counsel of Qualcomm, said in a statement. ''The ICA's decision does not in any way affect Qualcomm's ability to collect royalties on CDMA, WCDMA or other CDMA-based standards, and has no impact on the ability of Qualcomm to collect royalties from sales of CDMA equipment in Korea.'' |
