Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 172.29

-2.2%

Dec 17 3:59 PM EST

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To: Eric L who wrote (118590)	5/10/2002 7:02:30 PM
From: Maurice Winn	Read Replies (2) of 152472

Eric, all this patent pooling business is a red herring. Patents are as much a cost of doing business as the plastic case and the screen and the marketing. Nobody is pooling plastic housings, screens etc. There is a bill of materials [soon to be halved by RadioOne] and each negotiates for the components they want to buy. If we start at the subscriber, there is an amount they'll pay for the service. Very large bets were placed on that at the time of the spectrum auctions. Now, how that subscriber value will be divvied up will be reflected in the share price of service providers [spectrum owners] not in the OEM handset makers' profits [which will be determined by competitive design and marketing] or in patent owners' profits. Nokia is barking up the wrong tree. The patent prices are set [as far as QUALCOMM is concerned]. Nokia just needs to tell Vodafone what the handsets will cost and that will determine the value of Vodafone [which is determined by the money they paid for spectrum and the value subscribers will place on the service offered - when they bid, they committed themselves and ran out of wriggle room]. If subscribers don't like the service price or patents offered by Vodafone in their phones, then Vodafone is going to have to cut their prices. Which will probably mean they go bust because they can't foot the bill for the debts incurred to overbid on spectrum. If Vodafone [and others] go bust, that just means the assets will be sold to somebody who can value subscriber needs more accurately. Which means spectrum will be valued at less than the $100 billion bid during the Telecosmic mania [if Nokia is right that patents need to be capped to sell 3G and protect Vodafone's profits - but maybe 3G is worth MORE than what was bid, same as the C-block was thought to be high-priced until the second auction dropped jaws]. QUALCOMM doesn't need to cut their patent prices [which are as sure a sure bet as anything judging from judgements by courts and market demand for 1xRTT in Korea] to get the ball rolling and to protect Vodafone's share price. If QUALCOMM cut their royalty to zero, it wouldn't make a significant difference to market demand and Vodafone's share price because [as I pointed out in the Elite Zone Message 17449356 ] the component of royalty in the final price to subscribers is tiny. Nokia's demand is a load of rot and shows that Nokia doesn't understand how markets work [or they are just swindlers]. Which means SELL NOKIA. They are going down the gurgler and here comes Samsung [and the Mongolian hordes from the East]. I have spake! Mqurice

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