re: Qualcomm and the Gang of Four +5
<< Their (supposed) decision to reduce royalties demonstrates their opponent's Gorilla power. >>
They didn't make a decision to "reduce" royalties.
The major global wireless players with the preponderance of WCDMA IP dealt with an important issue that needed to be dealt with just as 3GSM WCDMA is going into commercial operation rather than letting it drag out and rather than dealing with it in a fragmented manner.
They made a decision to set royalty rates and deal with IP royalties along the lines suggested last May by the largest, most profitable, and arguably the most powerful player in communications equipment manufacture, and the most vocal promoter of open and non-proprietary committee based standards that dominate a $125+ Billion market.
Its not over yet since we haven't heard from "The Americans" (Mototola, Nortel, Lucent, InterDigital, et al) but the direction is set.
<< They are trying to wrest control away from Qualcomm by reducing price. >>
Qualcomm had no control, has no control of 3GSM WCDMA, so there is none to wrest. They totally abdicated control of 3GSM WCDMA when they caved on their 5 principles, insuring themselves an IP revenue stream at the expense of that control and forever relegating themselves to chimpanzeehood in the broad arena of mobile wireless telephony.
<< Usually when price is used as the great differentiator, it's a sign of their own weakness and, thus, a sign of the opponent's power. >>
Price is not the great differentiator of 3GSM WCDMA v. cdma2000. Openness is the main differentiator and there are a slew of other differentiators.
As for the "media piece" you referenced. It is pretty poor, IMO. I don't know who Marko Maunula is although I am familiar with Conventum Securities. Somebody ought to tell Marko that Qualcomm isn't going to lower its royalty rates to anyone, nor should they.
Meantime ...
>> Industry Leaders NTT DoCoMo, Ericsson, Nokia and Siemens, and Japanese Manufacturers Reach A Mutual Understanding to Support Modest Royalty Rates for W-CDMA Technology Worldwide
PRESSI.COM
11/06/2002
Ensures fair and competitive pricing for W-CDMA handsets and infrastructure equipment
Industry leaders NTT DoCoMo, Ericsson, Nokia and Siemens today reached a mutual understanding to introduce licensing arrangements whereby essential patents for W-CDMA are licensed at rates that are proportional to the number of essential patents owned by each company. The intention is to set a benchmark for all patent holders of the W-CDMA technology to achieve fair and reasonable royalty rates.
The companies together own the clear majority of the essential Intellectual Property Rights (IPR) relevant to the W-CDMA standard selected already by about 110 operators worldwide. This arrangement would enable the cumulative royalty rate for W-CDMA to be at a modest single digit level.
The above companies also own a significant number of the essential patents applicable to the CDMA2000 standard. These patents will be licensed at fair and reasonable terms.
As essential patent holders, Japanese manufacturers Fujitsu, Matsushita Communication Industrial (Panasonic), Mitsubishi Electric, NEC and Sony Corporation have also expressed their willingness to co-operate with such arrangements.
"It is of the utmost importance for the mobile communication industry and in the interest of both licensors and licensees that the cumulative royalty cost of W-CDMA is maintained at a competitive level which encourages both greater growth and innovation in the industry," says Lothar Pauly, board member of the Siemens Information and Communication Mobile Group. "As we - the major IPR holders - make our patents available we ensure that W-CDMA stays an open and globally acceptable technology."
"This initiative means that cumulative royalty rates of W-CDMA are kept at a healthy level. For example according to the recent developments in China the cumulative royalty rate seems to remain even under our earlier targeted cumulative 5% level. This makes the W-CDMA standard safe to invest in for operators, manufacturers and application developers," says Yrjö Neuvo, Executive Vice President of Nokia. "We can see the IPR initiative gaining support amongst the industry, and encourage others to join."
"W-CDMA is the standard selected by most operators in the world for their future business, and with this initiative we believe the cumulative royalty will be even lower for W-CDMA than GSM, which has enjoyed unrivalled success compared to any other standard in the world says Torbjorn Nilsson, Senior Vice President Marketing & Strategic Business Development of Ericsson.
"This initiative is meaningful for promoting the W-CDMA services by keeping cumulative royalty rate below 5%," says Kota Kinoshita, Executive Vice President of NTT DoCoMo. "We have discussed through the 3G Patent Platform Partnership (3G3P) how to license essential patents at acceptable royalty rates. We believe the intent of the arrangement is well harmonized with that of 3G3P."
The W-CDMA standard is developed by the 3rd Generation Partnership Project (3GPP). In the 3GPP standardization process the declaration of essential IPRs is mandatory. The European Telecommunications Standards Institute (ETSI) and the Association of Radio Industries and Businesses (ARIB) in Japan maintains an updated list of IPR declarations for 3GPP.
NTT DoCoMo is the world's leading mobile communications company with more than 44 million customers. The company provides a wide variety of leading-edge mobile multimedia services. These include i-mode®, the world's most popular mobile internet service, which provides e-mail and internet access to over 35 million subscribers, and FOMA®, launched in 2001 as the world's first 3G mobile service based on W-CDMA. In addition to wholly owned subsidiaries in Europe and North and South America, the company is expanding its global reach through strategic alliances with mobile and multimedia service providers in the Asia-Pacific, Europe and North and South America. NTT DoCoMo is listed on the Tokyo (9437), London (NDCM), and New York (DCM) stock exchanges. For more information, visit www.nttdocomo.com i-mode and FOMA are trademarks or registered trademarks of NTT DoCoMo, Inc. in Japan and other countries.
Nokia is the world leader in mobile communications. Backed by its experience, innovation, user-friendliness and secure solutions, the company has become the leading supplier of mobile phones and a leading supplier of mobile, fixed broadband and IP networks. By adding mobility to the Internet Nokia creates new opportunities for companies and further enriches the daily lives of people. Nokia is a broadly held company with listings on six major exchanges.
Ericsson is shaping the future of Mobile and Broadband Internet communication through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. Read more at www.ericsson.com/press
The Siemens Information and Communication Mobile Group (Siemens mobile) offers the complete range of mobile solutions including mobile devices, infrastructure and applications. Devices include mobile phones, wireless modules, mobile organizers and cordless phones as well as products for wireless home networks. The infrastructure portfolio includes GSM, GPRS and 3G mobile network technologies from base stations and switching systems to intelligent networks, e.g. for prepaid services. Mobile Applications cover end-to-end solutions for Messaging, Location Based Services or Mobile Payment. You can access further information about Siemens mobile on the Internet at www.siemens-mobile.com <<
Nokia`s initiative from last May:
>> Gang of Four set W-CDMA Royalty Cap
Drew Cullen
The Register
06/11/2002
It's taken months around the negotiating table, but today four leading mobile phone firms agreed to reduce royalties for W-CDMA patents, ensuring that payments comprise no more than five per cent of equipment costs.
The Gang of Four - Nokia, Ericsson, Siemens and NTT Docomo - want mobile phone networks to choose W-CDMA technologies for their 3G networks, in preference to Qualcomm's competing cdma2000. Qualcomm is strong in North America and Korea, while the Gang of Four have Europe pretty much sewn up. The rest of the world is to play for.
Qualcomm is historically notorious for usurious royalty fees, but this does not appear to apply, so far as cdma2000 is concerned - with the company setting royalty rates at 5-6 per cent of equipment costs.
However, the W-CDMA standard, drawn from multiple patent holders, could have seen royalty payments account for up to 20 per cent of equipment costs, according to PA Consulting. So today's announcement should be seen more as a game of catch-up than of leapfrog. It can also be seen as a triumph of diplomacy for Nokia, which kicked off the move for flat-rate royalties in May this year.
The W-CDMA Gang of Four hold a 'significant number' of relevant patents, but it's unclear if it can bypass Qualcomm IP altogether. But they say that essential patent holders, Fujitsu, Matsushita Communication Industrial (Panasonic), Mitsubishi Electric, NEC and Sony have "also expressed their willingness to co-operate with ... arrangements" to keep collective royalty payments at five per cent of equipment costs.
Early indications are that the total royalty levy will come in under this target. ® <<
>> Nokia Advocates Industry-Wide Commitment To 5% Cumulative IPR Royalty For WCDMA
PRESSI.COM
May 08, 2002
Nokia sees 5% as the optimal cumulative royalty rate to encourage growth and innovation in the industry
Highlighting the fact that WCDMA technology has been adopted by the vast majority of mobile operators worldwide and is fast emerging as the global standard of choice for 3G, Nokia is advocating an industry-wide commitment that royalty rates for the 3G technology should not exceed 5% cumulatively. Under this proposal no manufacturer should pay more than 5% royalties covering all essential WCDMA patents from all patent holders... <<
press.nokia.com
- Eric - |
