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

QCOM 151.59

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Jan 30 9:30 AM EST

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To: Eric L who wrote (68050)	8/21/2007 1:05:10 PM
From: Art Bechhoefer	Read Replies (3) of 197445

now they are accruing them and will continue to do that until rates and terms are settled Eric, I don't know of any evidence or statement from Nokia that it is accruing unpaid royalties pending settlement. In fact, the offer of a flat $20 million (rejected by QCOM) suggests just the opposite: Take it or leave it, because that's all you're going to get. Because I don't see evidence of any set aside by Nokia, I conclude that Nokia's profits are overstated (based on my assumption that QCOM will prevail in the key issues currently under litigation). You're right that I may be understimating the extent of Nokia's IPR in regard to WCDMA and related technologies. But my thinking here is that many of Nokia's recent patents in this area are likely to be invalidated, at least in the U.S., owing to the recent Supreme Court decision in the KSR case. Even if I underestimate, I find it difficult to accept the notion that Nokia can sell WCDMA and related devices WITHOUT infringing one or more QCOM patents. All it takes is one claim of infringing one patent. I also believe we may never know who is infringing what, as the matters will be settled largely out of court as soon as one of the parties sees it could lose big time. Since Nokia has increased its global market share, and since the largest portion of what Nokia sells in the way of handsets is still GSM, with a smaller (but growing) number of WCDMA and related units, one can legitimately credit the continued growth in the GSM market as a main cause of Nokia increasing its market share. However, the profit margins on high end units that incorporate both GSM and WCDMA are where the future is, and Nokia apparently believes its future is marketing those units without having to pay royalties to QCOM. We'll see. Art

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