He Said, She Said, Why Can’t Qualcomm and Nokia Just Get Along?
So far the market appears to be taking the opposite viewpoint to that we expressed yesterday regarding the Qualcomm/Nokia license disputes. For balance we give a quick rundown of the opposing case, along with our rebuttals.
IT Business seems to be on Nokia’s side.
Maybe Qualcomm is ready to give up the US$250 million it gets in royalties from Nokia every year, but as it withdraws from the CDMA market Nokia is also diverting considerable marketing resources that help boost the standard. Just a few days ago for example, Nokia released a pair of CDMA camera phones, which were greeted with the usual enthusiasm by various media.
Sure, but wouldn’t you think if Nokia was paying $250 million in royalties it may be earning a little bit on the handset sales themselves? Are they ready to give that up? As we said yesterday, we’re sure Motorola and Samsung won’t mind if they do.
JP Morgan cut their rating on Qualcomm.
The broker cited its belief that contract negotiations with Nokia (NOK) over the Finnish handset maker’s WCDMA license agreement could very likely end in a stalemate with the companies failing to agree to new terms without the third-party intervention the joint venture with Sanyo Electric would have provided.
The broker told clients it believes there is little-to-no chance of Nokia’s WCDMA royalty rate increasing and a non-trivial chance it could decrease.
That’s what they said the last time the royalty was up for renewal, too.
Qualcomm has their own response:
“In view of Nokia’s existing small presence in CDMA2000, we do not believe that Nokia’s decision to ramp down will have any impact on the continued growth of CDMA2000 or any adverse effect on Qualcomm,” said Qualcomm’s Steve Altman in a prepared statement. Altman added that Qualcomm plans to “continue to allocate substantial resources in expanding the CDMA2000 market and we will continue to work in close partnership with our many other licensees.”
Finally, with the war over 3G over (Qualcomm won) the battle is now turning toward who will get to dominate the 4G standards. Here the battle is between Qualcomm and Intel.
A squabble between Intel and Qualcomm seems to have at least temporarily derailed an IEEE work group.
The move to suspend the committee’s activity was prompted partly by a complaint by two Intel engineers, according to a Wall Street Journal report. Reportedly, Intel alleged that the group showed an unfair “bias” toward Qualcomm as a result of MBWA Working Group chairman Jerry Upton’s “relationship” with Qualcomm.
For its part, Qualcomm, a San Diego wireless technology company, argued that Intel and allied companies are using IEEE procedures to stall development of 802.20 technology because it is a potential competitor to WiMax, a wireless technology backed by Intel.
“It is very clear that Intel’s sudden interest and the sudden influx of its allies is designed not to contribute to 802.20, but to disrupt and to try to stop its development — because they see it as a threat,” Ronny Haraldsvik, a VP of marketing in Qualcomm’s mobile broadband business, told the WSJ.
Ah, business.
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