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

To: carranza2 who wrote (139752)	10/31/2005 10:08:58 AM
From: slacker711	Read Replies (1) \| Respond to of 152472

Using your example, and substituting NOK in place of Samsung as a company that develops and uses its own chipsets, why would NOK join into the EEC fray? It gets the best deal of all from a royalty cost standpoint. Well, they may believe that the other complaints have a shot....but even if they dont, what's the risk? At a minimum, this antitrust complaint keeps Q's lawyers (with attendant costs) busy for the next few years. I think some others upstream have talked about playing hardball and not renewing Nokia's license. This isnt much of an option since Qualcomm wouldnt be able to produce WCDMA chipsets without Nokia's patents. If Qualcomm couldnt produce chipsets and Nokia couldnt produce handsets, it would absolutely destroy the WCDMA handset market, so it isnt like Qualcomm can just sit back and collect royalities either. A couple of questions that I have though....is the agreement with the standards organisations to offer FRAND IPR deals legally binding? I assume that FRAND isnt a requirement of IPR law in general. Also, is "tying" only illegel in the case of monopolies? It would seem to me that Apple ties their OS to their hardware but it isnt illegel because they have so little market share. Do I understand that correctly? Slacker

To: carranza2 who wrote (139752)	10/31/2005 4:57:56 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 152472

Not knowing how the law treats the difference in royalties when someone buys a QCOM chip, as opposed to buying someone else's chip, it is difficult to determine if there is a legitimate case here. Do you know if the law simply allows a firm to charge what the market will bear? Seems to me that if the QCOM chip is too expensive, competitors will offer their own versions, even if customers pay a little extra in royalties (percentagewise) than they would if they bought a handset with a QCOM chip. If there is a case here, it might have something to do with royalty rates being different for different customers. The only difference I know of regards the lower royalty rate paid by Chinese suppliers on phones sold in China, and the higher rate paid by Chinese suppliers on phones sold outside of China. So, would the complainants in the recent suit attack that deal as well? One way out of the mess would be for QCOM to adopt a uniformly low royalty rate for everyone (including the Chinese, possibly), and then increase the licensing fees. On the other hand, I have never seen any law that requires a specific royalty rate. Bottom line, it seems to me, is simply that the chip suppliers want a lower royalty rate. Is that a legitimate cause of action in a lawsuit? Art