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

QCOM 179.26

+0.5%

Dec 15 3:59 PM EST

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To: JGoren who wrote (62515)	4/12/2007 2:10:57 PM
From: Art Bechhoefer	Read Replies (2) of 196971

how does that translate into today's environment? The 2001 royalty rate reflects market conditions in 2001. An appropriate royalty rate in 2007 should also be governed by market conditions. The best evidence that the current rate of about 5% paid by some 140 licensees and objected to by only one speaks for itself. Nokia will have a tough time getting around that issue. Your view that there are many possible ways to calculate an effective royalty rate that appears to be around 3% is right on target. I don't think that a detailed analysis of how Nokia got that figure would help it much before a court or the EC. Finally, the announcement that QCOM rejected the Nokia $20M offer but used it to show that Nokia has unilaterally exercised its option to renew the license, albeit at an unaccpetable royalty rate, should really work in favor of QCOM. First, it shows that Nokia believes its licensing agreement is in effect. Second, it may justify QCOM continuing the cross licensing agreement that purportedly expired on April 9, thereby allowing QCOM to continue selling equipment containing Nokia IP, without infringing Nokia's patents. The more announcements I read from both Nokia and QCOM, the more I am convinced that Nokia is already defeated, and the ultimate renewal agreement (probably very close to the existing one) will probably never be revealed publicly. One thing for sure, though, is that QCOM MUST demand the same royalty rate (subject to quantity discounts, perhaps) as that paid by other licensees, both to defend itself on the matter before the EC, and as a matter of fair and ethical business practice. Art

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