If QCOM reduced its royalties from the current range of 4 - 5% to something closer to, say 3%, it could claim the lowest royalties in the entire industry, and any argument that the rate was too high would be demolished, especially when compared to the rates charged by the GSM cabal. More important, even Nokia, with its friends among the European regulators, would still be laughed out of their offices.
I disagree, and look at the Nokia / royalty rate situation differently.
In my view Nokia doesn't care whether QCOM charges 3, 4, 5 or even 6% (putting aside for a moment whatever modest influence this may have on preserving GSM). What Nokia cares about is what it pays in royalties relative to its direct competition.
If QCOM were to lower its royalty rate to 3% today it would still be in the same fight with Nokia that it is today.
Nokia is determined, and will probably fight to the point of being one breath short of death, to preserve the highly advantageous, oligopoly-like, position it and the small group of net zero cross license participants in GSM enjoy. Losing their royalty advantage relative to the up and coming WCDMA handset manufacturers amounts to losing an important piece of their armor. |
