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

To: Jeff Vayda who wrote (146700)	5/31/2018 7:56:36 AM
From: JeffreyHF	9 Recommendations Recommended By AlfaNut Art Bechhoefer DavidRG Fiero Jim Mullens and 4 more members Read Replies (1) \| Respond to of 196562

The "method" is not unique to the wireless market. In fact, it has existed since the inception of cellular, constituting the "custom and usage" of the industry for decades. What's unique is that Qualcomm has two separate business under one roof - QCT and QTL. In order to seed the CDMA market initially, they also made devices and sold infrastructure, later divesting themselves of those money losing businesses. QTL licenses were drafted in ways to defense against the future effects of potentially narrowing "patent exhaustion" common law interpretations, which have in fact occurred, as the balance of power has shifted more favorably to patent implementers. (That pendulum of power can and will swing both ways.) IDCC is a pure IP company, sells no chips, and charges device based royalties. Qualcomm could always separate QCT from QTL, if the selling of chips were determinative of the propriety of charging industry practice device level royalties, but so far has not found it necessary. Ericsson sells handheld devices and infrastructure products, yet charges device level royalties for its SEP and non-SEP IP. Samsung sells chips, infrastructure, and devices, yet charges device level IP royalties. As Jeff Vayda has noted, this is all about money, and the greatest beneficiary of the IP, Apple, who has become the wealthiest company on earth through wireless enablement, is the squawking goose on the issue. Their objective is both avaricious and anti-competitive, seeking to slow the wireless evolution trajectory, and impede the ability of smaller competitors without Apple's R&D budget to thrive.

To: Jeff Vayda who wrote (146700)	5/31/2018 11:34:01 AM
From: Qurious	Read Replies (2) \| Respond to of 196562

Q's key customers have been fighting Q over royalties for years. That's a fact, not fake news. I am saying Q should find a way to stop fighting with its key customers. Instead, switch the fight to its competitors -- Intel, Mediatek, Spreadtrum, Huawei and any new-comers. If Q wants a sliding-scale royalty, slap it on modems, not on the handset. Make the royalty 50% of the contract price for the modems. $10 low end modem -> $5 royalty. $25 high performance modem -> $12.50. I think that is at least as defensible as a sliding scale based on the handset. Personally, I believe that is a lot easier to justify. I am saying take the hard line with your real competitors (Intel et al). Make it hard for them to compete -- without violating anti-trust, natch. Remove sliding-scale, handset-based royalty as a cause of conflict with your customers. To recap, I want Q to capture the same or more royalty dollars. But I want to make that a non-issue with its customers by rolling it into the (negotiable) price of MSMs. And no more onerous reporting of handset sales required, at least for MSM customers. Check: advantage for using MSM. If anyone wants to fight Q over royalties, I want it to be with Q's modem competitors, not its customers. Then we can be nasty as we want to be. Who knows; this may be what Hock Tan had in mind. Am I being clear enough now? We are on the same side. Just different methods.