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

To: barty who wrote (52729)	6/23/2006 6:56:11 AM
From: slacker711	Read Replies (1) \| Respond to of 196991

The point here from Nokia's perspective is that they think their patent position is bigger than Qcom's and if that's the case what is fair and reasonable? My version of fair and reasonable....forget the cross license, a 5% rate on all WCDMA chipset shipments from Qualcomm for Nokia and a 5% rate on all WCDMA handsets from Nokia to Qualcomm. That is just about the best deal that I could ever see Nokia getting out of this. Qualcomm will go through all the problems of the spinoff rather than give a royalty free license to Nokia (or even a substantial cut). That would hit their '07 earnings hard. Nokia could just take a provision every quarter on the balance sheet. It definitely would hit estimates, but would any investors think that the money wouldnt eventually be collected? You might apply a discount but I doubt anybody, including Nokia, thinks they could get away without paying. Slacker

To: barty who wrote (52729)	6/23/2006 7:03:16 AM
From: JeffreyHF	Read Replies (1) \| Respond to of 196991

It`s ironic that Nokia`s failure in CDMA,now spun as a failure of CDMA (that wasn`t their position 4 months ago),was announced on the same day SK Telecom decided to invest $1 bil in China Unicom`s CDMA business. KDDI surely has performed beautifully head-to-head with DoCoMo, Korea remains staunchly CDMA, despite forced forays into WCDMA/HSDPA/WiBRO by the Korean government, and Verizon and Sprint can`t get their DORevA CSM`s fast enough. I doubt Nokia intends to forgo the U.S. CDMA market, and peddle their brand at only T-Mobile and Cingular. All they`ve done is stop bleeding R&D dollars to avoid using Qualcomm chipsets, a strategy that never had considered their shareholders best interests.If they are to sell any Nokia phones to Verizon, Sprint, Alltel, or Cricket, China Unicom,or anywhere in the world, whether manufactured by Pantech or anyone else, they must have a license from Qualcomm. As for their "patent counting" approach to WCDMA IPR, the number of patents, as opposed to their quality, difficulty,sophistication, and complexity, has never been the way IPR has been valued, witness the current agreement between QCOM/NOK, and QCOM/all others.There is a commercial course of conduct, established by arms length negotiations aided by enlightened engineers and attorneys, that led to the present reality. It`s understandable that Nokia would like to change the rules of the game, because it can`t win on the merits.

To: barty who wrote (52729)	6/23/2006 9:09:06 AM
From: kech	Read Replies (2) \| Respond to of 196991

Thanks for sharing that argument. It is an interesting one. But what happens if Nokia doesn't sign a license? They aren't going to sell WCDMA phones? How quickly would Motorola and Samsung and LG jump into that gap? So it hurts Qualcomm a bit for while but time is on Qualcomm's side in that exchange. As Nokia loses more and more WCDMA share it will be harder for them to get it back.

To: barty who wrote (52729)	6/23/2006 9:34:41 AM
From: Dash of Reality	Read Replies (1) \| Respond to of 196991

What happens if we don't see a settlement before APril '07 - well Qualcomm could try seek an injunction but they would not be able to recognise revenue on Nokia's WCDMA shipments (where their share is approaching 30%). That would hit their '07 earnings hard. Nokia could just take a provision every quarter on the balance sheet. The point here from Nokia's perspective is that they think their patent position is bigger than Qcom's and if that's the case what is fair and reasonable? Remember Qcom have to license their patents on FRAND terms - and there's a pretty interesting question that courts will no doubt have to decide in the end. If Nokia gets a big concession it will mean the have a massive cost advantage over rivals. If Qualcomm decided, for some reason, not accrue revenue on WCDMA revenues from Nokia, Price Waterhouse would force them to accrue revenue probably equivalent to the amount of revenue that Nokia is negotiating to pay. Nokia is not disputing their obligation to pay, they are disputing the royalty rate. Both companies would continue to accrue revenue and expense. I'm not sure that you would even be able to see a difference in one or two percent in the royalty rate to one company on their revenues, especially since they are growing at a rate of nearly 30% a year. The second point you bring up is more concerning. Since most of Qualcomm's licensing contracts offer protection to the customer that they are receiving the lowest royalty rate, Qualcomm would be forced to pass on any reduction in royalty rates to all of the licensed parties who have this protection written into their contracts. DoR