While Nokia may not have been able to "milk" the best deal out of Qualcomm, I find it hard to believe that Nokia gave up its patent portfolio for nothing. For example, did Nokia grant a royalty free license to Qualcomm in exchange for reduced royalty rates for infrastructure? Or, perhaps Qualcomm does, in fact, have to pay royalties to Nokia. I emailed Nokia's IR department and, unfortunately, the contact is away till the 9th.
As I appreciate it, infra rates are substantially below handset rates. I don't have the exact figures but I've heard that they are in the 2 1/2% range. While the actual infra rates naturally played a part in the structure of the deal, I don't think that the rates themselves were the driving force. Instead, I think it was the need for an infra license that was important as Spinco's upcoming birth which would have allowed Q to demand higher rates on all licenses.
I think Nokia caved because it knew that it stood to pay a lot more in royalties if it had to deal with QClassic after the spin off. Plus, the carriers that are interested in 3G infra from Nokia were surely pressing it to get rid of the infra uncertainties.
The Q probably argued during the negotiations that Spinco would certainly obtain GSM IPR through cross-licenses, trading its "seed" CDMA IPR it received from QClassic. Thus, it could achieve its goal one way or the other. Nokia probably recognized this and gave in to the inevitable.
Nokia is paying the standard rate pursuant to its original license, 4% or thereabouts, in exchange for royalty-free license to Q of GSM IPR. After Spinco, it might have had to pay more. I think that's probably the quid pro quo for the GSM IPR. Getting the GSM IPR now instead of having to deal for it after Spinco's birth, and being subject to whatever uncertainties that might have caused, probably kept Q from demanding the higher rates it could have asked for after Spinco came into existence.
It all makes sense to me now. |
