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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 159.42-1.2%Jan 16 9:30 AM EST
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To: Stock Farmer who wrote (76823)5/2/2008 4:37:53 PM
From: Maurice Winn  Read Replies (1) of 197247
 
An underlying problem with FRAND is that things change. What is reasonable one year is not necessarily reasonable another year.

In free markets, the reasonable price of something is not the cost of the raw materials plus a fee for manipulating them into final form. The reasonable price is what the market will bear. So, selling ice cream in bulk at a supermarket in winter in a low income area means a reasonable price per kilogram is a lot less than a reasonable price selling the same ice cream a scoop at a time at a hot beach in winter.

When 3G was just an idea, with no idea of what the market would bear, people guessed at market sizes, competitive position, revenue and profits. The outcome was that Qualcomm agreed to about 5% royalty and spectrum bidders decided $100 bn for some 2GHz in a few countries in Europe was reasonable.

Since then, things have changed. The 3G market is becoming established and spectrum valuation can be better determined. It turns out that Qualcomm's technology is worth a LOT more than 5% and, so they say, 2GHz isn't worth that much,

I haven't checked spectrum value but after figuring out NZ spectrum values and knowing Europe passably [near enough for government work], I doubt that 2GHz is worth that much money if the 800MHz and 450MHz are given market tests of value and opened up to mobile cyberspace via CDMA2000/OFDM/HSPA etc

Mqurice

PS: That was a good view of the legal position. Thanks.
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