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To: Caxton Rhodes who wrote (44320)	7/11/2001 4:24:10 PM
From: Eric L	Read Replies (1) \| Respond to of 54805

Cax, re: Analysts on QCOM & NOK Pact Makes 'Friends' of Antagonists Nokia, Qualcomm Being somewhat conservative I wouldn't read to much into it yet, and deservedly 'Friends' needs to be placed in quotation marks, but ... I have always thought that Qualcomm and Nokia could enter into a win-win situation. Wireless sector is in dissarray and right now only Qualcomm and Nokia show strong balance sheets. Neither company can turn the sector around by themselves. The two working together conceivably could. If 50% of this is factual, it is good news for the sector, and I am once more waiting for Cha2 here (Chaz there) to say "Qualcomm and Nokia, Together the World" (maybe). * After a long standoff, two antagonists this month forged what analysts call an inevitable. alliance. Nokia Corp. and Qualcomm Inc. signed a mutual assistance treaty. Both say it's a win-win pact. * The Qualcomm-Nokia deal, forged by patent lawyers, gives Nokia the right to Qualcomm's 3G technology, both for handsets and network gear, at royalty rates that satisfy both companies. It gives Qualcomm rights to Nokia's 2.5G technology for free. * "It prevents a hot war. Both companies saved themselves huge legal bills. - Michael Ching, Merrill Lynch, Analyst, in a report titled "Nokia now a Friend, not a Foe." - * "Some analysts looked at Nokia as the acid test for industry acceptance of Qualcomm's position," - Lou Lupin, Qualcomm's general counsel - * Nokia delayed accepting Qualcomm's patent claims as long as possible, The reason? To save money. "It was something that had to happen," Nokia wants to make money building 3G systems, "but Nokia had never signed contracts with Qualcomm for infrastructure. Nokia knew they had to make payments to Qualcomm, but they delayed as long as they could. Europe will be the first test of 3G. Nokia needed this locked down because it's going head to head with Ericsson. It's a two-way race. Ericsson's share is 35% of the 3G infrastructure market in Europe. Nokia has about 30%. Nokia has emerged from the pack, ahead of Motorola and Nortel Networks." - Mike Walkley, Dain Rauscher Wessels, Analyst - * "Nokia had to change its thinking. A year or two ago, Nokia came to terms with the fact that Qualcomm technology win drive the 3G era. Now it's coming to terms with the fact that it has to buy the capabilities that would take too long to build. There is a payoff for Nokia. Nokia now can move faster into infrastructure. What it loses in expenditures, it gains in flexibility and speed," - Dan Steinbock, author of "The Nokia Revolution" - * Nokia needed the deal so it could start to ship 3G equipment. Now relations between Nokia and Qualcomm should improve based on precedent. Motorola signed with Qualcomm several years ago. Their relationship, too, was tense, but they now have a good working relationship. - Nat Cohn, Goldman Sachs, Analyst - * The pact shows that Nokia is ready to launch 3G in Europe. We believe that this agreement suggests that the world's largest cellular handset manufacturer sees (3G) as imminent. More information could come out when Nokia releases second-quarter earnings, slated for July 19. * Qualcomm could reap a bonus from the Nokia pact. It could prod similar agreements with Alcatel Alsthom SA and Siemens AG. These two large equipment vendors have yet to expand their current licensing deals with Qualcomm. - Tim Luke, Lehman Bros., Analyst - Source: Peter Benesh, IBD, 11 July 2001 - Eric -