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 165.84

-2.0%

1:04 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: AlfaNut	12/12/2006 2:17:11 PM
	Read Replies (2) of 197189

Another hypothesis. A lot of attention has been focused on what royalty rates comply with the FRAND concept, whose patents are more essential, and so on, in analyzing the battle between QCOM and Nokia. It looks like a fight over how much QCOM can charge Nokia. What if the real issue is all about pass through rights? For reasons previously discussed (on the other thread) I believe Nokia’s true goal is the ability to collect royalties from competitive phone manufacturers. Assume QCOM and Nokia each hold a basket of patents in which some apply at the chip level and some apply at the phone level. This, I expect, is what shoots down the “double charging” and “already paid up” arguments against QCOM's licensing fees. If QCOM gives Nokia full pass through rights on its portfolio it’s of no real consequence to QCOM – Nokia is only its own customer (despite the fact that they have a chip makers license) and their license will be paid up by whatever net fee is negotiated. Conversely, if Nokia gives QCOM full pass through rights on both chip level and phone level patents it shuts down Nokia’s dreams of collecting royalties from all the other manufacturers. There may also be a dividing line between GSM and WCDMA here, and it could be important, because all the WCDMA devices also need to do GSM. If Nokia denies QCOM the quid pro quo of full pass through rights it can not only go out to charge other manufacturers a royalty fee, but it might also damage QCOM’s chip selling business by undermining the “pay here only” benefit the chips have carried. That could go a long way toward Nokia keeping the heavyweight status in WCDMA that they enjoy in GSM. In this context, the “QCOM charges too much” arguments may really only be related to how much room Nokia can free up to charge royalties before the market screams murder or, alternatively, just another negotiating pressure point to stick to QCOM and presumably threaten its royalty collections across the board. How, if at all, does FRAND rationally apply on the concept of pass through? Could this really be what the end game is all about? Might be worth thinking through.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next