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

To: tero kuittinen who wrote (3930)	4/1/2000 3:45:00 PM
From: A.L. Reagan	Read Replies (1) \| Respond to of 34857

After all - how can the Qualcomm licensing income be exactly the same for a standard it designed and a standard that was a collaboration between NTT-DoCoMo, Ericsson and Nokia? Well, absent external political and standards bodies pressure, because it's their wheel and axle and they say so (until the basic "wheel and axle" patents expire as Allen stated a post or two back). The real issue may be to what extent NOK and ERICY can freeze QCOM out of the W-CDMA chipset market if it doesn't cooperate on royalties, and, to make this leverage meaningful, the potential size of the W-CDMA versus CDMA2000 chipset market. Assuming QCOM can't design around NOK's IPR, and wants/needs to be in the W-CDMA chipset business, NOK has some decent leverage, which gets more and more powerful as the relative size of wideband versus narrowband 3G systems increases. I have to believe that NOK wouldn't expend the time and effort to develop W-CDMA unless it was confident that QCOM ultimately would have to compromise on royalties in order to play in the potentially much bigger wideband chipset sandbox. So, it looks like a giant game of "chicken" to see who blinks first. But, it is ultimately in the best interest of all parties to compromise in order that the market opportunity for true 3G, in all its standards, can be maximized. The FUD wars can only last so long until delays in exploiting 3G market opportunities end up costing all the participants. My QCOM friends may shoot me for saying this, but it is pretty damn clear that there will be no 3G hegemony under the cdma2000 standard, and that NOK would not spend considerable resources developing W-CDMA unless it had essential IPR. Fearless prediction: There will be a cross-license agreement within the next nine months on wideband (with possibly other parts and pieces of the 3G puzzle), and it will not be NOK "capitulating" - but QCOM will get the larger share of the royalty pie. (I do not believe that this is about a continuation of some emotional "hagfish war" devoid of economic rationale.)