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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (75474)	7/6/2000 12:55:39 PM
From: Rick	Read Replies (1) \| Respond to of 152472

Let's see, Qcom's 4-5 percent royalty for a top line system is just too much to expect anyone to pay, but GSM's 15% to 29% royalty is reasonable. It make sense to me. "3G patents initiative devised to avoid 'Qualcomm-type' disputes By Joanne Taaffe 19 June 2000 Mobile telecoms equipment manufacturers and operators are setting up a new company with the aim of reducing the royalties they pay each other for the use of patented technology in third-generation mobile systems. The as yet un-named enterprise hopes to not only slash the cost to vendors of developing equipment, but also open up the market for 3G mobile devices and network equipment to new players. The company's partners hope to cap future technology royalty payments at 5% of product costs. Currently, royalties account for as much as 29% of mobile system costs. As well, the patent-licensing cooperative could help avoid protracted disputes such as that between equipment manufacturers and Qualcomm Inc., San Diego, California, a former hand-set manufacturer that decided to specialize in licensing key technology to other vendors instead, but at a price. "There were a lot of difficulties with GSM in making affordable technology," said Brian Kearsey, director general designate of the 3G Patent Platform Partnership (3G3P), the cellular industry venture that will set up the new non-profit-making company. "[If 3G is] to take off there need[s] to be a mechanism to make acquisitions of that technology cheaper." Patent disputes have dogged second-generation GSM equipment manufacturers, which develop products according to standards that are set by the European Telecommunications Standards Institute, Sophia Antipolis, France, but which have grown out of the research work of individual manufacturers and operators. Not only are the rights to intellectual property often expensive, it is hard for those that buy them to gauge whether a patent is essential to the development of a product or not. "The issue has been a real problem in GSM," said John Matthews, principal consultant, Ovum Ltd., London. "Manufacturers [pay] license fee on top of license fee on top of license fee." This can result in royalty fees making up 29% of the cost of a hand-set, according to Leo Debecker, acting director of the European Public Telecom Network Operators Association (ETNO) in Brussels, whose organization backs the scheme. The majority of ETNO's 46 members run mobile operations." totaltele.com - Fred