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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Mika Kukkanen who wrote (9143)	3/28/2001 8:57:21 AM
From: Caxton Rhodes	Read Replies (1) \| Respond to of 196881

Mika- It's too bad for the GSM players that CDMA is SIGNIFICANTLY MORE THAN 5% cost effective than anything GSM can offer, plus does data, etc., etc., etc . Caxton

To: Mika Kukkanen who wrote (9143)	3/28/2001 10:25:19 AM
From: Getch	Respond to of 196881

Mika, You have explained exactly why the Asian manufacturers are so successful with CDMA technology. Because they were not in group with initial IPR claims to GSM, they were effectively shut out by the very high combined royalty rate of GSM. However, with a level playing field in CDMA (everybody pays Q), the Asian manufacturers have focused their efforts to great success. If the GSM royalty rates were not so exorbitant to those not in the initial group, then they would have put more focus into GSM. It would have meant less sales in recent years for the Europeans in GSM, but the Asain manufacturers would have been more technologically agnostic, instead of hard core CDMA supporters. With the huge lead that GSM had in the world market, it might have been enough to stop CDMA 4-5 years ago. GSM and Europe won a classic Pyrrhic victory in 2G. Won the battle - Lost the war. >>The reason why the royalty rate is always on the GSM agenda is due to the time honoured tradition of cross licensing. The GSM IPR (I believe an American company claims to own the most - Motorola?) was cross licensed between the main suppliers, therefore IPR costs on equipment to any buyer was virtually nil. However, the problem would be for a new supplier in the market with no IPR - in which case they would have to pay the combined royalty. Hence the need to be involved in the development of any 'standard' from the outset. The number IPR claims for WCDMA is incredibly high - I believe it to be one of the highest ever in any standardisation drive than ever before. <<

To: Mika Kukkanen who wrote (9143)	3/28/2001 10:32:48 AM
From: Caxton Rhodes	Read Replies (1) \| Respond to of 196881

Mika- It is interesting in the mid 1990s how the GSM guys convinced most carriers not to wait for cdma (big mistake for the carriers) and install GSM systems. Now they are saying the opposite, don't go with cdma2000, we'll have something almost as good in 2-3 years. If carriers wanted the most immediate return before by going GSM, don't under estimate the same thinking to convince carriers to switch to a better technology that is immediately available. The GSM guys are really in a world of hurt. They now know they got suckered into $119B in debt to screw themselves in 3G. They now know they are locked out of the major growth in China and as of yesterday, they could get killed in India too. Korea is now taking the money and running. The US is going to kick their butts in terms of cost. Caxton

To: Mika Kukkanen who wrote (9143)	3/28/2001 10:44:56 AM
From: Webster	Read Replies (1) \| Respond to of 196881

Mika, may I respectfully say that you are able to eloquently evangelize ignorance with your facts and figures. The "time honoured tradition" of cross licensing one might say is a form of creating a cartel with the intent of driving out competition and innovation. Your statement about the problem - new suppliers - if you are not part of the process from the outset, then you are able to eliminate future competition. I believe these "new suppliers" have to pay the GSM pool 15% as the "combination royalty." One might say that this is the supplier's problem and not the customer's problem. The IRP claims on WCDMA is incredibly high - you are correct. The IPR claims on cdma2000 is incredibly low. QCOM developed cdma2000 which it then licenses to all. No one company including future companies will be at a competitive disadvantage. WCDMA was designed by a committee. Now one could say all the wonderful things about these IPR claims, but the principal business issue of WCDMA is that if you are not part of the early process, then you will be faced with paying the "combined royalty". So with regards to future competition; what is open (WCDMA) is closed and what is closed (cdma2000)is open. Your belief that "WCDMA is one of the highest ever in any standardization drive than ever before" is correct. This is good for the cartel and it is bad for competition. Your interpretation that with QCOM's involvement, everything is now 5% more expensive. You are again correct. I have heard that the "combination royalties" are at least 18% on wcdma. One might also say that as a result of having an engine, the price of an automobile is more expensive. This would be true. Without an engine a car would not take you places. With WCDMA, QCOM is the engine. You go no where with out it. I think one of the real issues that in open dialog with people, it is very easy to rationalize your own position. I found no factual errors in your statement; but at the same time you are guilty of evangelizing the truth which is still very harmful. Harmful to the EU service operators who have spent $190 billion based on you and NOK evangelizing the truth. The problem comes when you are not able to deliver on the truth and then the EU service operators are faced with a financial crisis, because of the truth you evangelize. I believe the EU and all GSM operators might be better off listening with their eyes. FWIW Thanks Web.

To: Mika Kukkanen who wrote (9143)	3/28/2001 11:22:03 AM
From: David E. Taylor	Read Replies (1) \| Respond to of 196881

Mika: The reason why the royalty rate is always on the GSM agenda is due to the time honoured tradition of cross licensing. The GSM IPR..... was cross licensed between the main suppliers, therefore IPR costs on equipment to any buyer was virtually nil. However, the problem would be for a new supplier in the market with no IPR - in which case they would have to pay the combined royalty I guess I knew that but hadn't thought it through. So if you are one of the original "main suppliers" of GSM equipment such that you "co-own" the IPR, you pay nothing. If you're a competitor manufacturer wanting to break into this market, you are at a cost disadvantage because you have to cough up for the IPR, maybe as much as 29% if I believe the article I posted. Sounds like a nice "time honoured tradition" - a cosy club with high cost barriers to entry, hardly a level playing field. At least with everyone paying Qualcomm the same royalty for CDMA IPR and Qualcomm itself not an equipment supplier, the playing field for equipment suppliers is level. Now I'm left wondering why, with the Chinese government's oft-expressed goal of fostering the growth of domestic equipment manufacturing companies, why they would even consider putting those fledgling businesses onto the GSM playing field, where they have to cough up to the "club" for the GSM IPR much more than they're coughing up to Qualcomm for CDMA IPR, while at the same time putting themselves into competition with the same equipment GSM suppliers they're paying IPR royalties to, and who have the IPR for "free"? Unless the GSM IPR "owners" decide to cut their royalty rates to match Qualcomm's, I can't see the rationale for the Chinese effectively agreeing to filling the pockets of the club members with GSM IPR royalty fees and putting themselves at such a disadvantage. In fact, to truly level the playing field, the GSM IPR fees would need to be reduced to zero. With a potential growth in China to 300 million wireless subscribers by 2005, this is not a fight for the GSM club to give up on easily. No wonder there's so much fog and smoke swirling around the playing field! David T.