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To: SKIP PAUL who wrote (19617)	12/13/1998 12:59:00 AM
From: JGoren	Respond to of 152472

Timeframe. There are certain deadlines by end of the year. However, ITU has said it wants to adopt standard by March. Ericy-Qcom trial is scheduled before that, in February. Ericy's PR ploy is similar to that of Clinton's and it has backfired because the Congress (i.e., industry)is ticked at the constant lies and strategy of not admitting it problem. With Ericy's latest troubles, some of its allies, who are also competitors, are going to see an opportunity and may not be as willing to back Ericy as they have been in the past.

To: SKIP PAUL who wrote (19617)	12/13/1998 11:12:00 AM
From: kech	Respond to of 152472

Under the assumption that things are under negotiation, and that ERICY still has some chips to bargain with like NTT commitment, Europe, China, GSM NA installed base let's speculate on how the negotiation might progress. One fear I have is that while ERICY gave in on the 4.03 to 3.8 chip rate, it may be because it was an untenable chip rate for a global standard since it didn't fit into the 5 mHz US requirement. Thus while this appears to be "give" on ERICY's part and may suggest more give to come, it could also mean that it has found a globally useable chip rate that still shafts the CDMAOne installed base. Anyway, here are some possible competitive/negotiation scenarios. ERICY digs in under pretense of cooperation (probability 20%): scenario 1 : ERicsson tries to rally its installed base to support this 3.8xxx chip rate (because they would be disadvantaged by backward compatibility to CDMAOne) . To achieve this ERICY has to isolate Q as an global IPR bully and skate on thin ice around the whole IPR issue. This requires developing substitutes (which takes time) and long litigation. The success of this scenario for Ericsson depends on whether any of its installed base defects for CDMA2000 with IPR settled (such as NTT). Ericy cooperates on chip rate only (probability 60%): scenario 2: Ericsson "trades" its potential to be obstreperous in terms of litigation, delays, etc. to the Q in order to agree on a 3.6xxx chip rate and a greater likelihood of licensing Q IPR. It claims "double" cooperation because it has dropped its ideal chip rate twice and demands licensure of all Q IPR at reasonable rate. However, from here on it maximizes all differences in standards by differentiating handsets, etc (JMD and other engineers help me out here on all of the things that ERICY can do to make it difficult for Q to assault the ERICY installed base). Again, it tries everything it can do to shame the Q into licensing IPR at a reasonable rate after all this alleged cooperation. The Q can fight back in this scenario with offers of CDMA2000 faster to the likes of NTT and others. It can also use GSM/CDMA overlay in Europe, China, NA GSM. But it does lose (notice spelling) on all the fence sitting former GSM'ers that want to maintain upgrade through ERICY and are willing to wait. Those that don't face immediate competitive threat are most likely to support ERICY - i.e. Europe and maybe China. Japan and NA GSM go with the Q on CDMA2000 or GSM/CDMA overlay. Q gets its current wish list (probability 20%): Scenario 3: The Q is able to negotiate not only the 3.6xxx chip rate but also gets global harmonization on a converged standard. Q gets a much smaller royalty payment of a much larger pie. Benefits of different systems are not settled through competition in the marketplace as much as anticipated strengths. The negotiated royalties depend as much on the likelihood of who would win in scenario 2 as anything else. If Q is confident it could win Scenario 2 and can't get a good up front royalty on the converged standard maybe it should be happy with accepting scenario 2. If Ericy is confident that it can convey to its installed base that it will have an alternative that will allow high bandwidth data, with clear IPR (at some point in the future) and that it can promise competitive separation from the CDMA forces in the market then maybe it should go for scenario 2. (It may be unlikely that ERICY could do this with a TDMA2000 variant but it may be able to eventually cobble together a CDMA alternative out of bubble gum, bailing wire, and litigation- the real point is that this will take TIME and forbearance on part of installed base if it is possible at all). If both are unsure of the above there is room for a settlement on 3. Which one will it be? I put my own probabilities on the above. What do others think? The big question is what are the payoffs to each under scenario 2? Since these will really determine the settlement, it would be interesting to speculate. On a scale of 100, I would put the payoff in scenario 2 to Q 60 and Ericy 40.( I might be biased though and would love to hear why it should be the other way around or worse for the Q if someone can make that argument). That is in a competitive slugfest where the market determines the success of each, given a converged 3.6 chip rate, but differences in standards are as great as possible elsewhere and tuned to each installed base, who will win?