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

To: Art Bechhoefer who wrote (72738)	12/28/2007 2:44:05 PM
From: JGoren	Read Replies (1) \| Respond to of 196649

Started reading the Qcom brief to the Supreme Court. Informative discussion of the various types of licensing agreements Qcom has; recommended reading. The brief notes that both parties (Quanta and LG) are licensees. The chip maker's license is restricted (APLA: Licensee may only manufacture (or have manufactured for it) chips and sell only to authorized purchasers, that is handset mfrs who have a license. In other words, it seems to me that once December, 2008 rolls around, the real lawsuit is against Texas Instruments and other chip suppliers to Nokia for an injunction to enforce the chipmakers' license. Shut Nokia off from any chips to put in its phones! Query whether it is an unfair trade practice to import phones with chips that violate a contract, so that an ITC action may be brought instead or both brought. With respect to the Sprint decision to go WiMax for 2008 when LTE should be available in 2010, it makes no sense to me to spend huge sums of money if 4G will offer so much better speeds and capacity. I don't see how a WiMax adopter can get its investment back fast enough to justify the expense.

To: Art Bechhoefer who wrote (72738)	12/28/2007 3:21:17 PM
From: engineer	Read Replies (1) \| Respond to of 196649

Art, The theory is good, and IU understand it. the trouble is that there are so many pricing games out there on devices and handsets that this would make it like 50 times harder to find hte right numbers. Kind of like getting hte residuals on a movie contract. the producers find a way to net out to zero most of the time.

To: Art Bechhoefer who wrote (72738)	12/29/2007 2:10:58 AM
From: JGoren	Respond to of 196649

Your theory sounds nice, certainly "politically" relevant or acceptable to Europe and its penchant for value-added taxes. However, it subsumes that there is a single, aggregate identifiable royalty rate for all the IPR and then breaks it down into components based on value added. I don't know of anything that suggests your application is any better than the present formulations. Economic theory would suggest that, let's say 5% for the chipmaker and 5% on the net selling price of the handset for use and sale does exactly the same thing. Restrictions in a license agreement enable a lower royalty fee, price for the IPR. Theoretically, the price of all the royalties adds up to the aggregate value of the IPR. You, however, assume that the value of the components themselves are the value of the IPR. The existing royalty agreements, since they are tied to the net selling price of the chips or handsets, tie the royalties to market forces. In negotiation, presumably the potential licensee figures in what it thinks the value added will be to it and agrees to a royalty rate accordingly.