Qualcomm Moderated Thread - please read rules before posting Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

QCOM 175.37

+0.7%

2:15 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: barty who wrote (52729)	6/23/2006 9:34:41 AM
From: Dash of Reality	Read Replies (1) of 196995

What happens if we don't see a settlement before APril '07 - well Qualcomm could try seek an injunction but they would not be able to recognise revenue on Nokia's WCDMA shipments (where their share is approaching 30%). That would hit their '07 earnings hard. Nokia could just take a provision every quarter on the balance sheet. The point here from Nokia's perspective is that they think their patent position is bigger than Qcom's and if that's the case what is fair and reasonable? Remember Qcom have to license their patents on FRAND terms - and there's a pretty interesting question that courts will no doubt have to decide in the end. If Nokia gets a big concession it will mean the have a massive cost advantage over rivals. If Qualcomm decided, for some reason, not accrue revenue on WCDMA revenues from Nokia, Price Waterhouse would force them to accrue revenue probably equivalent to the amount of revenue that Nokia is negotiating to pay. Nokia is not disputing their obligation to pay, they are disputing the royalty rate. Both companies would continue to accrue revenue and expense. I'm not sure that you would even be able to see a difference in one or two percent in the royalty rate to one company on their revenues, especially since they are growing at a rate of nearly 30% a year. The second point you bring up is more concerning. Since most of Qualcomm's licensing contracts offer protection to the customer that they are receiving the lowest royalty rate, Qualcomm would be forced to pass on any reduction in royalty rates to all of the licensed parties who have this protection written into their contracts. DoR

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next