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

To: Clarksterh who wrote (48525)	11/7/2005 8:15:20 PM
From: carranza2	Read Replies (2) \| Respond to of 196545

I think this is a heck of a lot of fun for those of us who love to speculate and guess, but doubt that either of the parties will push the "launch" button on any of their nuclear weapons. Reason will prevail and a settlement will be entered into that will end Holy Wars, Part II, and we will benefit from a decrease in the uncertainty. A few points now that I've had a chance to look at things and let them percolate: 1.- Slacker has sagely pointed out elsewhere that some of the patents don't seem particularly relevant, i.e., the one for airplane use. Although I am not technically qualified to say, it also seems that putting the crown jewel CDMA patents at the forefront of the complaint appears suspect. It doesn't seem intuitively correct that the spread spectrum stuff is relevant. On the other hand, I fully recognize that intuition is basically worthless in this game and note your comment concerning the increasing convergence between CDMA and some flavors of GSM technologies. Bottom line: Until we know exactly what Q claims, we really are in the dark concerning their validity though there are a couple of things that seem suspect. 2.- Nokia going nuclear would involve a claim that Q is abusing its patent position by selectively using its GSM portfolio to discipline any companies that challenge its WCDMA licensing scheme. I expect that Nokia will ultimately make this claim, perhaps very soon. But what are the remedies if Nokia should prevail? Probably that Q's GSM patents be declared unenforceable so long as it is illegitimately using them to pressure others for ulterior, i.e., WCDMA, purposes. This would be a "no big deal" result as far as Q is concerned. On the other hand, if Nokia loses this case, it is in a very difficult position. Bottom line: The bulk of the risk lies in Nokia's side of the battle lines. 3.- Bekkers and others are the source of data indicating that the Hagfish Clan's demand for up to 29% GSM royalties is a true and real thing, or was until recently. These are Euros; I think that whoever investigates will be aware or made aware of what the HFish do or did. Since it will be one measure of what is fair and reasonable, this will look bad indeed for them in the EC investigation which will focus on what exactly, failing specific regulatory quantification, constitutes FRAND. Bottom line: Advantage Q. 4.- I don't think this is reactive at all. JeffreyHF sagely pointed out last July that Lupin had discussed the issue of Q's GSM IPR when BRCM sued and that others distinct from BRCM were exposed. The rumblings of war had been heard for a long time before today or even before the Six Bandits called for an EC investigation. I was dealing with a major case at the time, and wasn't paying attention. Bottom line: This has been brewing for a while, and was filed on a well thought-out timeline--filed the day before Investor Day in London--just like the Bandits filed shortly before Q announced fiscal year earnings. There is a lot of calculation going on which includes timing, IMO. If any company overreacted or acted hastily, it was Nokia when it filed in the EC. It surely should have known that the bulk of the risk of losing what it should have guessed would be Q's retaliation lies with it and that such a loss might be very expensive. 5.- The whole thing is pure nastiness. It is obvious that Q was content to let the GSM IPR issue slide or was perhaps saving it in its back pocket for a rainy day. Why Nokia went to the EC in the company of a sleazy player like BRCM is beyond me. All in all, it seems that Q has the overll advantage, particularly with Flarion in its arsenal of weapons. You'll note that a lot of this BS began after Flarion was acquired. Perhaps a record of alleged patent and royalty abuse is being made so that the fees charged by with respect to OFDM are more reasonable. That WCDMA is barely getting off the ground after F-OFDM has already proven its technical merit is telling, IMO.