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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: moat who wrote (106)	7/24/1999 12:16:00 AM
From: JGoren	Read Replies (2) \| Respond to of 13582

Nokia does not use Qcom chips. There was a report long ago when Nokia was having trouble with its high end cdma handset (was it the 6185 ?) that it started procuring from the Q, but at a subsequent quarterly CC, management said Nokia was not buying chips from Qcom. Nokia did receive some software help from Qcom when it was encountering some problems. Nokia is a licensee of Qcom and pays a royalty for each handset sold, based on the price it receives. This is for basic cdma IPR. I don't know where Nokia gets its chips, but Qcom has licensed three companies to make cdma chips that may be sold to others, I think they are Pioneer, LSI Logic and I can't recall the third one. As you may recall, about a year ago MOT was in turmoil; I think a new pres. replaced the previous one. MOT made a decision not to buy chips from Qcom but make its own; that decision delayed entry of its handsets into the market by about a year or more. MOT at various time announced that it would introduce a cdma handset but there were several delays because they didn't work. MOT is a licensee to make cdma chips for its own use. MOT pays a licensing fee on the chips it makes and puts in its handsets; I believe it also pays a royalty per handset. I have a vague recollection that MOT bought Pantech, which buys chips from Qcom; MOT might be getting chips through Pantech. All handsets are Qualcomm based in the sense that they must utilize Qualcomm cdmaOne IPR. Moreover, all handsets made for 3rd Generation, data, will have to pay Qualcomm a royalty. (Qcom of course does not pay itself a royalty.) Manufacturers who buy Qualcomm chipsets are required to stamp on the handset the following words, "Digital by Qualcomm." When you see those words, you know that there is a Qualcomm chipset is inside. Qualcomm this week sued MOT for breach of the cross licensing agreement and for judicial termination of it license to MOT. There is speculation that one reason for seeking termination may be that MOT's royalty rate is lower than others pay due to its having signed a contract fairly early on when the Q needed licensees to get cdma to market. (If any of the above is incorrect, I am sure that others who have a better memory than I do will post corrections.)