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Wireless Utopia

The journey towards a free wireless world.

QC's Legal Battles

Wednesday, November 29, 2006

Some juicy bits from a very detailed analysis of the legal battles Qualcomm is facing right now.

As per the author, Nokia is worried about the royalty part. As the shipments of WCDMA handsets increase, it is seeing more and more revenues flowing from its coffers into QC's. Hypothetically if WCDMA handsets are the only handsets in the world, then effectively QC would own 5% of Nokia. That is unnerving for Nokia. TI has the same problem. Ericsson on the other hand wants a competitive edge over Huawei and does not want QC to license its technologies to them. All of these have ganged up right now and they are using the EU to press their case.

The WiMAX factor is a bit more interesting. It seems that QC is readying its legions of lawyers for litigation against WiMAX players right now which is inflating the bills. There is no doubt that QC will use these patents to kill WiMAX, after its Flash OFDM offering was piped to the post by WiMAX. The deal in question is the Sprint Nextel deal and the author goes to point out that Sprint is in a bad management shape right now after the merger. Nevertheless, the point the author missed out was that they had to differentiate themselves from the Verizon somehow. And it was either WiMAX or Flash OFDM. They choose WiMAX. Even though QC had decades of relationship with Sprint!

Another interesting take is on the QC partnership with the Operators. The Operators and the handset makers have been at logger heads for sometime now. The Operators want control over the handsets, preferably their own branded ones. The consumers want more services on it and the handset manufacturer's have to satisfy them. The classic case was the introduction of WiFi radio in mobile phones. It gives the consumers an option to bypass the operators network and obviously operators are not happy about that. Everybody is worried what happens when Skype goes into wireless devices and people start using that free service.

In comes QC. They are trying to fundamentally change the value chain and cut out the handset majors from it completely. It would just have the the chip providers, the manufacturer, the software provider and the operators. A win win situation for both QC and the Operators. The operators keep control on the platform and QC gets royalties from the ODM's. That in turn gets passed into the unit cost, which is again subsidized by the Operator. So everyone is happy, except the consumers. They dont get what they want. Funny!

In the end, the article predicts, the best brains will prevail. And QC, beyond doubt, has the best brains in the wireless technology business. That is true.

posted by Rajiv, 12:15 AM

2 Comments:

Qualcomm may have the "best brains" but they don't have the best patents, certainly not in the WiMax space.

And when you look at them, keep in mind that quantity doesn't equate to quality.
Said Anonymous Anonymous, 3:39 PM  

I guess the litigation will prove who has the best patents. The litigation against WiMAX is definitely on the cards as per the analysis!
Said Blogger Rajiv, 4:07 PM  

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