One analyst had the following to say about the EU Commission complaint. Heck of a good writer, by the way:
"In seeking such a stiff remedy for Qualcomm's alleged hegemeny and unfair practices, the companies in the attacking consortium may be signaling their own suspect health in the dynamic and wide-open markte for 3G UMTS handsets and infrastructure gear.... We believe the complaint puts untenable demands on the European Commission, which would be hard pressed to provide relief without more or less overthrowing the entire system of patent law, if not capitalism itself."
One problem the EC has is that it never did anything against Nokia, which dominates Europe and used its pricing power to drive its two main rivals into unprofitabilty and out of the business.
In its last CC, NOK claimed to ship 8 million units. By some estimates one quarter were true 3G WCDMA handsets. Assuming 12 million est. UMTS phones shipped that quarter, NOK had just a 17% share--way below its 33% global handset market share. You can see readily see NOK's problem.
Nokia has enjoyed a huge competitive advantage in GSM, but fears a future in which it is just one among many handset vendors in a WCDMA world.. As Nokia's primary supplier, TXN may have the same fear.
It may also be that the complainants think they can disrupt Qcom's lucrative royalty stream and thus starve Qcom's R&D thereby affecting Qcom's technological lead. The fact that the cabal could only get six companies to join probably means that won't work. Besides, while NOK et al are busy with the EC, Qcom and the Asians will be busy maintaining their lead and perhaps building on it.
The Fairfield Resources Report examined almost 8,000 patents and patent applications reputed to be essential to CDMA200 and WCDMA. In CDMA200, Qcom had 340 patents or 65% of the total deemed truly essential; NOK had only 45 or 9%. Of WCDMA Qcom owns 279 patents or 38% the authors deemed truly essential. Ericy was next with 129 patents or 18%. The disparity of 65% vs. 38% may be the basis for the complaint that the royalty rates for the two should not be the same. But, simple handcounting doesn't tell the story, of course, because it counts all patents as equal and there are probably only a handfull of truly essential patents. Steve Altman, in the CC, did point out that the Cabal had tried to work around Qcom's patents and couldn't. As most of you who have been on the thread a long time know, the WCDMA standard moved closer and closer to Qcom's suggestions (and patents) as time went on as the Euros found they could not get around Qcom. That is the essence of essential patents.
My personal opinion is that the EC won't do anything; this will slowly fade away. The EC would have to undo contracts made by 5 of the 6 complainants, who are sophisticated companies that entered into those contracts with knowledge, many including WCDMA before the standard was adopted, and they voted for the standard. They knew what they were doing. The contracts seemed fair and reasonable then. It is not up to any government authority to act as a renegotiator several years later, especially when the same complainants efforts to stop cdma-wcdma are coming home to roost with a loss of market share and technological lead.
As to Broadcomm, what need I say? It is still trying to negotiate a license and using both the US courts and the EC as a bargaining chip. I just hope Qcom can get a huge attorney fee judgment against Broadcomm. |
