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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Mr.Fun who wrote (3533)	2/2/2000 11:28:00 PM
From: slacker711	Respond to of 34857

OT.... 1. Call Ericsson IR and ask them if they expect to pay QCOM royalties for ever. The answer I got was that for the time being it was expedient, but that they believe there are several paths to implementing W-CDMA, some of which would require NO payment to QCOM and that they will explore all avenues. The problem with this line of thinking is that if I called up Qualcomm I am sure that they will say it is extremely unlikely that anyone will design a mobile CDMA system that does not use Qualcomm's patents. Rather than listen to the respective IR departments....I would rather look at the real world results. Ericsson has had at least 5 years (more like 7-8) to design a mobile CDMA system that bypassed Qualcomm's patents. However when push came to shove they agreed to pay Qualcomm the same royalty rate regardless of the CDMA implementation (IS-95, W-CDMA, CDMA2000). It is always a possability that they will be more successful in the future....however looking at their attempts so far, I have to doubt it. 2. Ask Nokia if they will need to pay QCOM royalties for W-CDMA. They will emphatically say no. This is exactly what Ericsson said....right up until they signed the contract last March. 3. Ask QCOM how much Lucent and Motorola have to pay for their infrastructure licenses for both CDMA-One and CDMA2000 - the answer is zero, they are royalty free. Cant confirm or deny this....havent checked for myself. 4. That said many companies will pay royalties because they haven't the technical resources to bypass QCOM. Many will buy QCOM chipsets IF they continue to develop good designs and sell them for a fair price. One of the interesting points in the March settlement was that users of Qualcomm's ASIC's would get pass-through rights to any IPR that Ericsson might have. Think about that....A company can either use Q's ASIC's and pay Qualcomm the current royalty percentage or they can use somebody else's and pay both the Qualcomm and Ericsson royalties (whatever they might be). 5. QCOM is not the universal solvent, perpetual motion, or the fountain of youth. It is a company that will have to compete very hard and very successfully to prove itself worth what you would pay for it if you bought it today. None of the above means that Qualcomm is necessarily a good investment at the current prices....All companies have to continue to execute to a certain extent....however a billion dollar plus royalty stream sure makes the execution risks smaller (look at MSFT). Slacker

To: Mr.Fun who wrote (3533)	2/3/2000 4:32:00 AM
From: Gus	Respond to of 34857

2. Ask Nokia if they will need to pay QCOM royalties for W-CDMA. They will emphatically say no. IDC's BCDMA (trademarked B for broadband) is, at the very least, one of the primary technology platforms that tight-lipped Nokia is pursuing to avoid the kind of heavy-handed QCOM patent regime that the Neopoint prospectus makes so clear. The facts in the sworn statements filed at the SEC speak for themselves: (highlighting CAPs mine) From the 3/31/99 IDC 10K: One of these licenses involved a CDMA cross-license agreement with Qualcomm, entered into in 1994 in settlement of litigation filed in 1993. In return for a one-time payment of $5.5 million, ITC granted to Qualcomm a fully-paid, worldwide license to use and sublicense certain specified and then existing (but excluding defined after- filed and/or granted) ITC CDMA patents (including related divisional and continuation patents) to make and sell products for IS-95-type wireless applications, including, but not limited to, cellular, PCS, wireless local loop and satellite applications. Qualcomm has the right to sublicense certain of ITC's licensed CDMA patents so that Qualcomm's licensees will be free to manufacture and sell IS-95-type CDMA products without requiring any payment to ITC. Neither ITC's patents concerning cellular overlay and interference cancellation nor its current inventions are licensed to Qualcomm. Under the settlement, Qualcomm granted to InterDigital a royalty-free license to use and to sublicense the patent that Qualcomm had asserted against InterDigital and a royalty-bearing license to use certain Qualcomm CDMA patents in InterDigital's B-CDMA products, if needed..... INTERDIGITAL DOES NOT BELIEVE THAT IT WILL BE NECESSARY TO USE ANY OF SUCH ROYALTY-BEARING OR NON-LICENSED QUALCOMM PATENTS IN ITS B-CDMA SYSTEM. ....In addition, Qualcomm agreed, subject to certain restrictions, to license certain CDMA patents on a royalty bearing basis to those InterDigital customers that desire to use Qualcomm's patents. The license to InterDigital does not apply to IS-95-type systems, or to satellite systems. Certain of Qualcomm's patents, relating to key IS-95 features such as soft and softer hand-off, variable rate vocoding, and orthogonal (Walsh) coding, are not licensed to InterDigital. The license to Advanced Digital Technologies was entered into as a part of the spin-off of InterDigital's government contracting business in 1996. This license is limited in its field of use to CDMA technology on the date of the license. IN 1999, INTERDIGITAL ENTERED INTO ROYALTY BEARING TDMA AND CDMA PATENT LICENSES WITH NOKIA, WHICH ARE PAID UP GENERALLY THROUGH THE PROJECT PERIOD, AND PROVIDE A STRUCTURE FOR DETERMINING ROYALTY PAYMENTS THEREAFTER. What are the IDC patents that are covered by this 1994 cross-licensing agreement with Qualcomm which resulted in Qualcomm paying $5.5 million to IDC and IDC paying $O to QCOM. As a point of comparison, ATT paid $2.4 million to IDC in exchange for a perpetual licensing agreement for TDMA in 1994 when ATT was still smarting from the legal mess that resulted from a minor technology agreeement with Spectrum Information that Spectrum used to hype its stock. A fair inference is that Nokia is relying on these very same BCDMA patents to develop its WCDMA products. The Neopoint prospectus is again instructive in this regard and one other troubling fact: the questionable claims by some of the more fanatical Qualcommers that their interpretation of QCOM's royalty regime is more accurate than the facts in QCOM's own SEC filings -- sworn statements!!! -- where Qualcomm has consistently requested for confidential treatment of royalty rates, purchase price of the infrastructure division (but not its obligation to provide $400 million in vendor financing thru ERICY), and the purchase price of the handset division. Message 12707606 If Qualcomm is requesting confidential treatment in its sworn statements filed at the SEC and QCOM IR is non-committal and playing linguistic linguini with words like relevant and essential in 3g (CDMA2000 or WCDMA), where is this message board crap coming from regarding QCOM's licensing terms? The range of assumptions by the analyst community is 5-10%. The same rumor mill that produced a number of $500 million to $1 billion purchase price for the handset division that produced an accounting charge of roughly half the accounting charge for the infrastructure division? Is it any coincidence that after the ITU passed the framework for a 3G family of 5 standards in October, 1999, QCOM was obligated to disclose this in their 11/17/99 10K: Ericsson, Motorola and InterDigital have each advised the TIA that they hold patent rights in technology embodied in IS-95. Lucent and OKI Electric have claimed patent rights in IS-96. In accordance with TIA guidelines, each company has confirmed to the TIA that it is willing to grant licenses under its rights on reasonable and non-discriminatory terms. In connection with the settlement and dismissal of the Company's patent litigation with InterDigital, the Company received, among other rights, a fully-paid, royalty free license to use and to sublicense the use of those patents claimed by InterDigital to be essential to IS-95. If the Company and other product manufacturers are required to obtain additional licenses and/or pay royalties to one or more patent holders, this could have a material adverse effect on the commercial implementation of the Company's CDMA technology. Material adverse effect. It's boilerplate until it ain't. Gus

To: Mr.Fun who wrote (3533)	2/3/2000 8:46:00 AM
From: Keith Feral	Respond to of 34857

Rebuttal: 1. GPRS is a "pathway" to WCDMA. ERICY will not pay QCOM royalties on GPRS - no one has ever made that argument. 2. NOK has no patents on WCDMA, to the best of my knowledge. 3. Lucent and Motorola have already paid for CDMA infrastructure licenses. They would not have to pay new "license" fees to make WCDMA infra gear. However, they would have to pay normal royalties. 4. QCOM has the best chips on the market. NOK and MOT are nowhere close to 1X technology. They can't even do CDMAONE chips right. Soon, companies like PCS and VOD will mandate that all chips be based on 1X technologies. Remember, 1X doubles voice capacity and provides high data. It's a no brainer. 5. CDMA is the universal standard for 3G wireless. If you want to call it a solvent or fountain of youth, be my guest. They have worked very hard to get where they are today. Their development of CDMA has been called "a felonious assault against the laws of physics" by George Gilder.