Michael - That is a tough one because there is an element of truth to the quote. The Q was using its infrastructure division to push for a market determined standard (with Nortel, Motorola, and Lucent) by demonstrating successful CDMA system implementation.
It gave up this form of control, of which it was only a minor influence anyway, in order to get E to accept, and pay royalties for, all of its CDMA patents. But it is not necessarily quid pro quo - in other words, the quote is worded as if it gave up something important to get something else. In fact, it could just as easily be viewed as that it sweetened the pot with the infrastructure division in order to get all of the royalties on GSM3. In other words, it gave up something symbolic in order to get something that is very material.
It can also be viewed that it did this because it believed that Nortel, Motorola and Lucent would represent CDMA infrastructure well in the market place where financing and subsidization are very important. In addition,with the arrival of Vodaphone/ Airtouch, it could creditably expect that a large European Service provider would have a strong interest in pushing for a converged CDMA2000.
So, it didn't "have to give up proprietary control" - in fact it was no longer as important as it once appeared to be when Qualcomm had to demonstrate that CDMA infrastructure could work and could be improved to achieve some of the early capacity targets. Instead, it gave up something that had declined in importance to get something that had increased in importance - royalty and licence rights to 3rd generation CDMA or as the quote calls it, GSM3. That is how I see it. Tom |
