Nokia and Qualcomm to kiss and make up? … Not really
By Stefan Constantinescu on Tuesday, December 5th, 2006 at 5:03 PM PST In Telecommunications
While the acrimonious patent negotiations between Nokia (NYSE: NOK) and Qualcomm (NSDQ: QCOM) trundle on, Qualcomm CEO Paul Jacobs believes the pair could yet work together on new business.
Today at ITU Telecom World in Hong Kong, Jacobs said it may be one way to resolve the patent discussion deadlock.
He said: "The negotiating team, from our point of view, are involved in a zero-sum game. You can imagine we’re not going to get very far until there’s some external pressure," such as approaching deadlines or judicial interference.
Jacobs added he’d like to see "more of a win-win", potentially involving Nokia and Qualcomm undertaking new business. "It’s a hard thing to do… you need a lot of trust and we have a long history of fighting. That might be too strong a word but it might not – certainly ‘competing vigorously’."
Source: Silicon
Nokia, based in Espoo, Finland, is in negotiations with San Diego-based Qualcomm to get a discount on fees, Jacobs said. Nokia’s technology-license agreement with Qualcomm expires on April 9, he said.
"We’ve been trying to have some discussion at senior levels to find a win-win solution to the dispute," Jacobs said yesterday in Hong Kong.
Qualcomm is confident it can use legal means to block the sale of Nokia handsets in the US if the two companies fail to reach an agreement by April, Jacobs said.
Source: Shanghai Daily
Technology … it’s a hell of a drug. Companies innovate and innovate to cure the never ending hunger of consumers. They make things better so we, the people, can buy the latest and greatest. Patents are created, and licensed, and while they do help out the company who put their time and R&D budget into a product, as a whole it hurts the industry.
Nokia doesn’t want to extend its contract with Qualcomm because frankly they think its licensing fees are too high. I don’t have enough information to judge weather that is true or not, but they cast the first stone in this epic debate. Qualcomm should be happy that Nokia wants to give them money in the first place, considering that Nokia has the highest global market share of mobile phones: wouldn’t it make sense to shave some points off a renewed contract? After all, cell phones follow the high volume, low margin economic practice. Nokia even said that in 2007 they plan to lower margins to around 15%. Now I’m not a lawyer, or an economist, but why can’t Qualcomm take a hit too?
It looks like Qualcomm has some cards in their hands. But your point is good, why can’t Qualcomm take a hit as well. It doesn’t make a sense the market is very soft these days and competition is high so why not to lower the licesing fees?
The market isn’t soft, that’s the problem. It would be suicidal for Nokia to stop selling CDMA phones, and Qualcomm will keep reminding Nokia of that fact.
I agree that Nokia doesn’t want to leave US market, those 10% of total market shares in the us are not the same 10% in Europe and Nokia understands that. And we also see now what Qualcomm is doing. It will be very interesting how is this all going to turn out for both parties. I don’t think there going to be a winner.