Tero:
Based on Nokia's disclosures, or the lack thereof, there is no way to find license income. But you are dodging my point. Qualcomm has always said that its royalties are in the low single digits, which implies something between 2% & 4%. I would argue that this is hardly a confiscatory sum to charge in exchange for an intellectual property right portfolio that functionally enables a new competitor to capitalize on ten years of R&D and dramatically accelerate its time-to-market. Some sixty licensees, basically everybody but Ericsson, have found the terms acceptable. I have repeatedly said that the GSM IPR is spread among many European companies. You seem to turn a deliberate blind eye to your own ETSI regulations that require members to license their IPR on "fair and reasonable terms"...if there were no royalty bearing licenses, there would be no need for ETSI to hold out a requirement for its members to license on reasonable terms. Because the IPR is spread amongst many companies, the isolated royalty streams do not appear as meaningful as those accruing to Qualcomm. However, if you add up all the royalties that must be paid, to all the patent holders that exist throughout Europe and the rest of the world, you would find that--FOR A NEW ENTRANT--the IPR burden for GSM is higher than CDMA. I have been told this by executives at Lucent, Motorola, Nortel, Samsung, Philips, several small (and lesser known start-ups who have tried) plus Qualcomm. It's possible that everybody is lying, but I think it is more likely that Bill Clinton and Monica Lewisky were "just friends". Ask the question to Nokia..don't let them off the hook with a comment about royalties payable just to them. Ask them, for the record, to estimate what royalty burden a new entrant, looking to provide infrastructure and handsets, would bear. If you are open-minded, and really intent on learning the truth, you will find that I am correct. One final, and rather obvious point. The bulk of IS-95 infrastructure, and a significant cohort of the handsets, has been produced and sold by companies other than Qualcomm. This creates a large inbound royalty stream for QC which is highly visible. In contrast, ERICY and NOK/A are the dominant vendors of GSM equipment, which obvious obviates royalties payable to themselves. Plus, as Tom correctly pointed out, the Europeans have cross licensed each other which makes it still harder to track the GSM royalty streams. Just like the air you breath--its invisibility does not mean it is not there.
Your comment that the U.S. has more analog subscribers then Europe is correct. Our government has chosen not to impose a technology choice. Rather it has allowed technologies to compete on their merits. From this perspective, I would point out it was an American company that first commercialized CDMA, while you Europeans were happily trudging along with your TDMA-based standard. Today, it is you guys who are moving toward the technology we perfected. So, tell me again about the advantage of government imposed standards? And, pray tell, if Ericsson had all the expertise you suggest in CDMA, why didn't it deploy CDMA back in 1991 instead of TDMA? Why is Europe now looking FORWARD to transition to an air-interface that America is already deploying? Hmmm.
I am not, as you suggest, "crediting" Ericsson with W-CDMA. ERICY first promulgated a form of wideband CDMA, then DoCoMo suggested another flavor and Ericsson cleverly merged its efforts with DoCoMo to enlist Asian support. However, your comment that there is not a "fight" over W-CDMA is surreal. Ericsson and Qualcomm just testified before the U.S. Congress over the issue. Read the transcripts word-for-word. Given this testimony, your attempt to characterize the debate as PR spin by Qualcomm really damages your credibility in my eyes. Organizations from ETSI to DoCoMo to SK Telecom have also been quoted in the debate. Meanwhile, show me ONE commercial W-CDMA cite! It seems that you are substituting hyperbole for reason here, particularly since a W-CDMA standard has not even been formalized yet. Even in America it is pretty hard to sue somebody for something they haven't done yet!
You seem to celebrate Asia's weakness as bad for Qualcomm but good for Nokia and Ericsson. This is another surreal perspective. China is ERICY's largest market; DoCoMo is, if memory serves, a Japanese customer for W-CDMA. Excluding South Korea, Qualcomm's business is far more dependent on the Americas then Nokia's or Ericsson's. If you think about it, you will find that you are whistling in a graveyard on this issue.
Your comments about "eighteen month old phones" belie an ignorance of Qualcomm's current and prospective product plans. I suggest attempt to educate yourself and then revisit the issue with me.
Finally, Tero--GSM is beginning a migration from TDMA to a CDMA-based air interface, rendering a significant component of your technology base obsolete in the process. Qualcomm is already the world's highest volume vendor of CDMA-based ASICs. So, my friend, I agree with your logic, but think that you have the players backwards.
Gregg |
