Rolatzi, you have to feel sorry for the Chinese, ever unable to cope with their colonial masters. Ericy tried to slime their way out of paying royalties, but was a lost cause. Nokia, Alcatel and Siemens all gave in and kneel at the throne. Their VW-40 vapourwear W-CDMA is in tatters [their equivalent of TD-SCDMA].
Hu Jintao won't be off to a very good start if his first moves are to steal property in good old cargo-cult fashion. Hopefully it's just a very silly negotiating ploy. Weak negotiators do that sort of thing.
Their idea is to develop a homegrown technology, which is really just a knock-off of QUALCOMM's creativity, and use that to develop low-cost home markets to leverage into vast exports. Japan tried that one and is now licking their wounds and watching Korea enjoy umpty billion in CDMA profits with CDMA taking over in Japan too.
QUALCOMM wisely charges only 2% royalties for Chinese licensees selling inside China and 7% for exports. They don't think 2% is reasonable? Good grief, what cheapskate chisellers. I wonder what payment they would consider is reasonable for inventing the greatest thing since the wheel. We had Koreans whining like a fleet of 747s over CDMA royalties, claiming 5% was stifling CDMA's development. Now, we don't hear much whining from the Koreans because giggling and whining simultaneously is really difficult. Try it! While keeping a straight face. They are giggling their way to the bank with vast piles of loot from sales of CDMA.
QUALCOMM presumably charges only 2% because they know the reputation of Chinese and their impecunious position - so a cheap royalty makes collection of the debt less critical [enforcing collection inside China could be problematic] and also helps them afford CDMA and get it going in China. But if they want to export, it's 7%, which is easily collectable because the 7th Fleet can stand offshore and shut down Shanghai if they don't pay their bills.
Meanwhile, if they want decent chips to run their cyberphones, the best ones are QUALCOMM's so they'll be buying those. If the bills aren't paid, QUALCOMM is likely to cut supplies.
Another aspect is the profit opportunity for China to short QUALCOMM at $36, then announce that they won't buy any more CDMA stuff from QUALCOMM as they have their own. Ignorant foreigners panic and dump QUALCOMM at low prices. Chinese profiteers then cover, and buy a big heap. Then, wait a month or two. Then announce that maybe they will go with QUALCOMM after all as they have some glitches in TD-SCDMA. The price of Q! then zooms up. So they sell all and short heaps and announce a couple of months later that "Hang on, we seem to have sorted out the TD-SCDMA problems so we'll go with that after all". The price of QCOM drops again in panic. They can repeat the process about 6 times judging from the previous time when they were/weren't/were/weren't/were/weren't/were going to buy CDMA for China. There are many $$ billions in profits to be had.
They can build out all their cdma2000 networks across China just on the profits from trading on the on/off/on/off TD-SCDMA development. Heck, they could give everyone a phone too!
It's not surprising they are trying that one again.
The gullible will be fleeced again.
Thanks for the info.
Mqurice |
