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

QCOM 182.19

+3.5%

Dec 10 3:59 PM EST

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To: Peter J Hudson who wrote (62396)	4/11/2007 8:30:34 AM
From: slacker711	Read Replies (4) of 196901

Take a low end WCDMA phone built on a TI chipset. QCOM gets a 4% royalty for use of its CDMA IP. Take the same phone and add high resolution camera, MP3 player and PDA functions for double the price. QCOM still demands the same percentage on the wholesale price. Did QCOM's IP add the additional value to the phone? FWIW, Lars and I have talked a bit about this. I think the test for the worth of Q's IP is made directly in the market place. Message 23387523 More importantly, the complaint before the EU isnt about the extra features that are in handsets, but about the amount of IP that Qualcomm has contributed to the WCDMA versus the CDMA standard. The question is if it is fair for Q to charge the same for WCDMA as they have for CDMA....when it is clear (no matter whose report you use), that they have contributed less to WCDMA than to CDMA. In my mind, the key to this is the fact that Qualcomm was prepared to hold their IP out of the WCDMA standard entirely. The current situation where Q receives the same royalties on both standards was a result of a compromise. Q caved on their demands for "harmonization" including having a single standard based on a chiprate that was a multiple of the IS-95 rate. If you go back to the pre-March '99 posts on the Q threads, nobody expected Qualcomm to get paid the same royalty for both standards. Here is a post from Gregg Powers that I think sums up the situation at the time. Message 7011295 Qualcomm gave up their architectural control over CDMA in exchange for the equivalent royalty rate in both standards. It was a compromise that the EU6 (minus Broadcom) all agreed to when they voted in the WCDMA standard in 2000....and in October '05, those five companies decided it was time to renege on that agreement and see if the EU would help. Slacker

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