Replies to post #17099 on Qualcomm Inc (QCOM)

[Data_Rox]

here's some reading Jim

http://www.nokia.com/NOKIA_COM_1/Press/sidebars_new_concept/Other_materials/wirelesscom2005.pdf

http://www.investorshub.com/boards/read_msg.asp?message_id=10680676

http://www.investorshub.com/boards/read_msg.asp?message_id=10683979

https://www.arete.net/REPORTS/3GIPR250105.pdf

http://dawn.cs.umbc.edu/INFOCOM2005/goodman-sl.pdf

[stricklybiz]

Jim/All the others Jim listed. I have a couple of questions that are bugging me. I think I read in one of the many back-and-forth articles that CDMA handset sales constitute only a low double-digit percentage of their total handset sales. I think I read in another that Nokia CDMA handset sales constitute only a low double-digit percentage of Qualcomm's chipset and royalty revenues. Is that far off or do I have selective memory concerning this as I do with my nearly forgotten sex life?

If that's correct, will Q recover all or part of the loss by increased handset sales by other licensees? Providers can't simply say "Okay, now we're GSM." they have to service their users. I think Q will get that back.

Will Nokia recover all or part of their loss by manufacturing more GSM handsets and selling them to existing GSM cellular providers. If NOK is to sell more they must take market share away from other manufacturers, and handsets appear to me to be so commoditized that the only way NOK can substantially increase their handsets in use would be to reduce prices. The famous low W-CDMA royalty cabal will have to reduce its royalty to about 9%.

I admit to having a Nokia 2G handset, even though I have an anti-NOK bias. It happened when Sprint stopped servicing my 1G handset I'd had for about 5 or 6 years--they no longer even had the cables to reprogram. I argued with a store clerk for about a half hour that Sprint had a contract with me to provide cellular service and thta the cellular service had abandoned my phone, and that I would neither pay extra nor extend my contract to get a phone they could serve. They--in short--were in breach of the contract. Finally he reached under the counter and slammed a box down (without breaking the glass, at least) and said something like, "Here!" At home I found it was a Nokia, and that's how I came to break the Trading With the Enemy Act. ;-)

[richbloem]

Jim, I agree that the general impression was that the Nok and E pursued UMTS with the goal of designing around Q's patents. However, I don't think it was as simple as that. I think there was an effort on their part to retain some of the GSM infrastructure and to a certain degree retain their top dog position. Of course, a major impetus had to be an attempt to dilute Q's IPR as much as possible. I don't think NOK or E was dumb enough to think they could design around all of Q's patents.

Now, of course, they are choosing to try to convince the general media and the industry that the value of a patent portfolio is directly equal to the quantity. They will take this argument to Q and Q will guietly advise them to go pound salt. Then Q will show them that the quality of your portfolio is much more valuable than quantity. They will pull out the study that argues that the quality of any patent is directly tied to the amount of patents that cite that patent. There is no argument that Q ranks number 1 in this measurement.

Personally, I am somewhat pissed that P. Jacobs ever brought up the fact that Nokia's license would need to be renewed by April, 07. Maybe they thought it was material and were obligated to do it, but I sure wish they didn't.

[Raglanroadie]

Although I gennerally agree with what you state I can't help but think that the so called work around was plan A while plan B involved watering down the standard so someday they could claim proportionality.