<<Do we know if the terms are level from now to the end of '08? That extension for renewal makes more sense if the terms of the extension make it increasingly expensive (and otherwise discouraging of bad behavior) to renew toward the end of the renewal period than at the end of the existing contract. A free ride on Q's back is too weird to be true.>>
[slacker]<I am fairly sure that I heard Qualcomm correctly when they talked about the extension, but of course, all of these comments are up for some amount of interpretation.
The terms of the extension dont make much sense to me and neither does the comment that Nokia will still be licensed for "very early" CDMA patents beyond the April '07 date. Why in the world did Qualcomm agree to this stuff???
I would try and go back to listen to the presentation again....but I'm busy packing for a trip to Kauai/Maui :-).>
Hey, have a great trip.
So OK, I went back and listened to Altman and Q&A after him in London, and there are a couple of things in there. I wrote them down. (Which I hate to do.):
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Q. ..."option to extend... what's the likelihood that Nokia will choose to drag it out through 2008 hoping to build a stronger case?"
A. (Altman) ...."there's a lot of things that are going to happen before the end of 2008 that will influence whether they enter into the extension, like some of the GSM cases that are ongoing. But after April, I'm sure there'll be some CDMA issues as well. So I think we'll see a lot of things in there that could cause that to be resolved earlier."
(Lupin): " ...if they do elect to exercise the extension, it actually extends the agreement for a considerable period of time...and so it can't be used simply to delay the action."
(In other words additional pressures make it increasingly unattractive to go past April.)
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wrt "partial expiration", Altman said:
"The agreement is complicated and I have to be a little careful as far as how much detail I go into... and then there's capture periods and so forth... some very early patents remain, some of their products remain licensed... the vast majority...." of Nokia's useful rights disappear. It's a pure product of complication and not significant.
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And the question was asked very specifically about whether there is any difference to Nokia between agreeing by April 9 or hanging out til end '08, the "Nothing to Lose" gambit:
(Lupin)-- That's a level of detail that I can't get into today. I don't want to be too mysterious, but we're just not at liberty to talk down at that level
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In all, a review of Altman in London is encouraging. Take a refresher look at Slide 81 and I think it was also 82 on the losses likely to be incurred by Nokia if they fail to negotiate an agreement by April 9 and go to royalty litigation are impressive and ring true. Note that Qualcomm under those circumstances goes to 6% standard rate to Nokia because the courts don't get involved in the cross licensing benfits of the contracts, just stuff like damages and infringements. Nokia @ 6% of the vast handset revenues vs. Qualcomm @ 2% or less to Nokia on chipset revenues nets Qualcomm 5.9% as a function of the relatively light chipset revenues... and so on. |
