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

To: Qurious who wrote (146712)	5/31/2018 12:03:20 PM
From: Wildbiftek	12 Recommendations Recommended By abcs DavidRG JeffreyHF Jim Mullens Lance Bredvold and 7 more members Respond to of 196564

There's only a couple customers at odds with Qualcomm's models; the hundreds of others have voluntarily signed agreements in accordance to their model. The most important of those at odds is Apple who have consistently abused other holders of IP (see UWisconsin's win over them) and have a lot to gain over Android from trashing Qualcomm's model. Do you really think they will let up their battle if Qualcomm restricted royalties to the modem? Given their recent hires, they are attempting to fab a modem into their AX SoCs for iPhones in the next 5 years, addressing a major integration deficiency they have next to Qualcomm and even Samsung. The will demand both a lower fee and that the royalty be specifically related to just patents implemented by the modem and patents related to the implementation of the modem itself. They will misreport royalties on other portions of their IP and continue an aggressive fight in court; if anything this attribution of royalties to the modem makes less sense value wise and dilutes Qualcomm's clout, making them easier to attack. Intel's model is utterly unsustainable going forward, and I don't think they will be making those same margins in 10 years, or maybe even 5 possibly; they will likely spin off their capex heavy fabs as well once datacenter margins erode. I would say the attacks against Qualcomm are a testament to how strong its technological lead is and how essential it is to the ecosystem; corporate customers aren't going to be swayed by branding and will resort to legal tactics to improve margins at the end of a product cycle. Apple in particular doesn't think twice about stealing IP or bringing in house a supplier's part when it can, and in this particular case it has none of the competency necessary so it's throwing a legal tantrum to either get higher margins, weaken android, or sweeten a deal for 5G.

To: Qurious who wrote (146712)	5/31/2018 12:49:37 PM
From: VinnieBagOfDonuts	4 Recommendations Recommended By DavidRG Fiero Jim Mullens waitwatchwander Read Replies (1) \| Respond to of 196564

(I noticed in another post you perhaps support splitting the licensing (Slacker's $30 example split 18/12). As there are a couple of other points in here, I kept the full post) 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. Charging the modem competitors could work for NonSEPs (although auditing and compliance would definitionally be harder than with customers). The problem is the licensing of SEPs which needs to be FRAND. The 50% is NonDiscriminatory but charging the "modem" implementers for all of the SEP IP their part doesn't directly utilize runs afoul of Fair/Reasonable. For example, the competitor modem implementers go to the ITC and argue "Q was previously receiving 'x' for all of the SEP and my part only uses 10% of their IP as they have publicly said, so 50% is too high and should be 5%". In such a scenario, that would be a 90% haircut and how would Q go about collecting that remaining 90% SEP IP and from whom? We all get and agree that it is better to charge competitors (vs. customers) for your IP because disputes will undoubtedly occur, but one needs to consider the unintended consequences that can arise when one obvious problem is solved. Also, this new licensing model would have no positive impact on government initiated serial litigation which I believe you previously cited as evidence of a problem with the existing model. Since those claims are often competition based, it would likely aggravate the situation as governments love to stuff their coffers under the guise of protecting/supporting local companies from unfair competition. Lastly, if your proposed licensing solution was such a slam dunk winner, I think Q would have moved in that direction by now, especially since an activist like Janus who garnered 3 board seats was involved.