This has been referenced many times here and at other blogs, and I’ve been trying to gain as much insight into the matter as possible. I ran across this MSNBC article over the weekend and think it gives great information as to what’s really at stake and what the two sides of the battle are fighting for.

Here’s the link

Here’s another link to GigaOm’s GREAT rundown/timeline of the whole Nokia vs. Qualcomm ordeal.

And here’s a link to the Nokia Press Release from this morning announcing that they’d made a payment to Qualcomm to cover UMTS licensing through the 2nd Quarter of 2007.

MobileBurn links to a Qualcomm Press Release today in which Qualcomm filed in San Diego that if Nokia continues using (I’m assuming that means selling) devices which use Qualcomm’s patents, they are automatically electing to extend the current agreement to the December 2007 date, as set forth in the agreement.

First off, as far as I can tell, this whole matter is only concerned
with the US and UK markets. If I’m wrong, please link me. Also, I believe
the US and the UK are the only places in which Qualcomm is asking for an injunction
to halt the sale of Nokia handsets.

So basically, Qualcomm holds patents to CDMA technologies, and Nokia
holds patents for GSM. Since WCDMA (or UMTS, or 3G) uses some of those
CDMA technologies, Nokia has to pay Qualcomm for the licensing. They’re
not arguing that. What IS being argued is HOW MUCH to pay.

The existing agreement covered CDMA technologies, which Qualcomm’s
patents have alot to do with, and thus, there are high licensing fees.
WCDMA uses less of those technologies, and thus, Nokia is arguing that
they shouldn’t have to pay the same licensing fees to use less
technologies. Qualcomm’s saying that they’ve spent so much money on
R&D for those technologies, and they need to recoup some of that
money.

This is much deeper than just licensing fees, though. Qualcomm doesn’t currently manufacture handsets anymore. Essentially, they’re simply a chip-maker/patent holder. On the other hand, Nokia, as we all know, is the world’s largest mobile handset manufacturer. Thus, the outcome of this ordeal will have a HUGE effect on the mobile telecommunications industry.

Also noted is that Nokia has an option to extend the current agreement through December. This is good and bad. Extending it would give them more time for negotiations, but would also lock them in to the same rate they’ve been paying, which they’re arguing against.

Official Symbian-Guru Predictions: I think that Nokia will exercise this extension clause at the last minute. Otherwise, they’re going to get into a nasty court battle, a la RIM vs. NTP, and both sides will essentially lose. In the interim, I’m not sure what they’re going to do. They obviously have high hopes for the US market, as they have built a new design center in San Diego and opened up elaborate Flagship Stores in both Chicago and NYC, with plans for a few more in California soon. Truly, this will be a fascinating year for telecom, starting in one week.

Categories: Qualcomm vs. Nokia
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