To: EnricoPalazzo who wrote (42099 ) 4/23/2001 9:36:13 AM From: Knight Respond to of 54805 For proof, look at W-CDMA. Now don't get me wrong; I'm not saying that W-CDMA is indeed superior to CDMA2000 (I don't know, and those who do on this thread seem pretty sure the answer is no). But the point is, this shows in technicolor detail how a competitor can hijack a standard. Yes, W-CDMA involves royalty payments to Q, and "W-RDRAM" would involve royalty payments to R, but there's still a substantial power shift. I wouldn't characterize W-CDMA as competitors hijacking a standard. I'd characterized it as an attempted hijacking which probably won't be successful. In fact, by responding to W-CDMA with their Spinco proposal, QCOM demonstrated just how powerful their position really is. Before Spinco, they had continually stated that the royalties would be the same for both W-CDMA and CDMA2000 (interpretation: "the presence of W-CDMA will not put us in a position of having to negotiate lower royalties"). This claim was met with some skepticism. However, with the Spinco proposal, QCOM demonstrated how they could back up their claim. By dividing the company in half and cleverly dividing the IP between the two entities, QCOM can ensure the following: 1) That they can enter into cross-licensing agreements for W-CDMA without sacrificing CDMA royalties. 2) That royalty costs for licensees of W-CDMA will always be >= royalty costs for CDMA2000. (W-CDMA will require royalty payments to QCOM for essential CDMA IP plus royalties to other companies that own additional W-CDMA IP. CDMA2000 will require the same royalty payment to QCOM for essential CDMA IP; however, no other royalties will be needed since no non-QCOM IP is required.) The Spinco proposal is what really firmed up my commitment to QCOM as investment. Would welcome any comments on my interpretation of Spinco proposal, if anyone thinks it's incorrect.