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Ban Halts Release of New 3G Phones

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Some perspective

Rich Brome

Jun 7, 2007, 6:01 PM
Although this is real and enforceable, I promise you that no one involved expects it to last very long. This is simply Broadcom strong-arming Qualcomm in their patent dispute... taken the extreme.

The next step is either:
  1. Being forced into a corner, Qualcomm caves on some of Broadcom's demands and agrees to license their patents (albeit for more than money than Qualcomm would like). That would drive up the price of all Qualcomm-based phones, though. That's not good, which I'm sure is part of the reason Qualcomm has fought so hard and let it get this far.
  2. Qualcomm lobbies Bush to veto the ITC ruling. (Yes, he actually has that power.)
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nextel18

Jun 7, 2007, 6:11 PM
Great points Rich. I think that Qualcomm should do nothing in this case because they should let the Gov and Pres Bush veto it and not to give into Broadcom’s demands especially since in this case they do not have to. Of course, it will hurt everyone affected by it for 60 days or so, unless there is a stay or what not, but if Bush does Veto it, Broadcom will not get any royalties from Qualcomm so it would be in their best interest to either settle now or take their chance. There is no way the government will allow this especially since they are intertwined with them. When there is an injunction Broadcom will not get any royalties so it will just hurt them.

(Disclosure; I am a shareholder of Qualcomm and that is why I have a bad stance aga...
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katrina

Jun 8, 2007, 5:27 PM
Oh man, just when I thought we were starting to agree on things! (I'm generally anti-qualcomm)
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nextel18

Jun 8, 2007, 5:45 PM
Aww. I will always back up Qualcomm because I think they are very important when it comes to the mobile industry. See how much this situation impacts every company?
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Versed

Jun 8, 2007, 8:24 PM
Yeah but they pulled similar nonsense with patents on Nokia. Screw them both.
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nextel18

Jun 9, 2007, 1:58 PM
Nokia is just too hard to negotiate with. Qualcomm I believe used to charge them around 3.5% or so and Nokia wanted it to be 1% I mean what kind of horrible negotiation is that? At least they could have said well we think this 3.5% or so royalty rate is too high but let’s try to negotiate that will help all parties involved. Nokia is just way to difficult. I actually think since Nokia and Broadcom work together on a lot of phones and use each other teamed up on Qualcomm to cause this type of situation because they can’t compete fairly. I would do anything possible to try to settle any of these outstanding issues with accurate settlement royalty’s rates. The only people who get hurt are the consumers.
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algorithmplus

Jun 10, 2007, 8:00 PM
Yeah, I remember hearing about how Qualcomm was trying to bully not just Nokia, but also Ericsson over the development of WCDMA. When it was awarded some of the patents on WCDMA, it was wanting to license those patents at a much higher rate than it did with its own CDMA2000. It was speculated that Qualcomm was doing this to try to stronghold carriers to choose CDMA2000 instead of WCDMA.

While I think that ban is not good for consumers, I do hope it does stay in place, because if it doesn't, it will go to show how the rich don't have to follow patent laws, yet can have their own patents enforced.
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renardlee

Jun 9, 2007, 10:38 PM
has qualcomm's stock price dipped because of this?
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nextel18

Jun 10, 2007, 9:01 PM
Yes. It has rebounded a little bit from the route it took because analysts think that this is a no brainer and will be appealed and overruled but it will not affect this current quarter when they report soon, which it will not. They also think that they will try to grow their outside this country’s market share and revenues. I agree. I have been buying a lot on the dips.
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renardlee

Jun 11, 2007, 12:47 AM
do u have info on metroPCS's stock, i want to know if its in a "buy" mode right now, i want to jump on that bandwagon
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nextel18

Jun 11, 2007, 3:35 PM
Yea, the stock PCS seems to be a very good one in the markets where they serve and the products and services they offer. I have checked it out and I think they are the best out of their peers. I think with future expansion in both the products and services they offer as well as customer additions they will expand on their revenues which would then give them a higher multiple and hope the stock should go up. I think it is a compelling story. It was up today so be careful, because it might come down after this big run up or perhaps it might just continue. Many analysts love this stock including myself.
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algorithmplus

Jun 11, 2007, 10:42 PM
One thing you have to add is that models of phones that include chips with the infringed patent *will* be allowed to continue to be sold (and imported), but no models that are not already imported for mass sale will be allowed.

That is much better for Qualcomm than not allowing any devices with patent infringed chips.
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nextel18

Jun 25, 2007, 5:27 PM
Indeed.
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jerry 12

Jun 10, 2007, 8:41 PM
i don't think that the president will touch it. 🙂
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nextel18

Jun 10, 2007, 8:51 PM
Well someone will. If this happens, it will cause many issues as well as billions upon billions could be lost and businesses would have lots of difficulty.
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Jayshmay

Jun 7, 2007, 7:04 PM
Bush has way, way, way too much power. Congress needs to take things into they're own hands!!!
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nextel18

Jun 7, 2007, 7:07 PM
I agree, but he is the President and on some matters, he could be overturned. In this case, however, since Qualcomm touches so many industries and intertwined with the Gov I think they should overturn quickly or at least have Qualcomm get the immediate stay and then make the two companies actually sit down, although it has been very difficult, to settle something because this will hurt the consumers.
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Jayshmay

Jun 7, 2007, 7:25 PM
Isn't it the Gov.'s job to look out for the cusumers??? And about Prez having too, too much power!!! I just think Congress needs to take things into they're own hands MORE, that's all.
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nextel18

Jun 7, 2007, 7:29 PM
With regarding the Gov’s look out for consumers we hope so and that is why I think they should veto, well Pres Bush should, because this will destroy a lot of companies and hurting the Gov. I do like that the Pres has this veto power when it comes to something as serious as this. Congress could overturn the Pres if they have more than 2/3 of the vote. (During a Veto.)
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Lacey

Jun 7, 2007, 9:22 PM
the impact on the domestic economy should warrent intervention. I doubt it will be long term, but immediate action would be better. Otherwise there will be price gouging (search eBay for the iPhone for example-it's comic) and panic among the sheeple. Engaget really did their part to encourage that. The level headed thinkers won't be as impacted, but there are far fewer and no one listens to them.
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nextel18

Jun 7, 2007, 10:12 PM
I think the ITC should not have issued an injunction but should have issued a lesser penalty or at least make a firm point to Qualcomm that they must pay for their violations. I think the injunction is too farfetched as it affects everyone involved and touching Qualcomm patents in the 3G CDMA and 3G WCDMA/HSDPA networks. So obviously that affects the future growth of Sprint’s DO, Verizon’s DO, Alltel’s DO, and AT&T’s HSDPA expansion. Of course they could all try to go to Nokia or release older technology but consumers want new ones so that would be very difficult. The Commission even mentioned that it could hurt the economy, yet, they still voted this injunction. Granted, violating patents are needed to have a harsh penalty but injunctions, ...
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katrina

Jun 8, 2007, 5:34 PM
My problem with the situation is that I firmly believe if Qualcomm were in Broadcom's position, they would be doing exactly what Broadcom has done. It is my belief that Qualcomm has a history of bullying others into paying crazy royalties on pantents and its time they get a taste of this.
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nextel18

Jun 8, 2007, 5:49 PM
I am not sure if Qualcomm would have taken the same position because when you do an injunction and it gets approved it hurts everyone involved including the company seeking that injunction. If the injunction does stand, Broadcom sees nothing and if there is a veto by the Pres again Broadcom sees nothing. What I would have done was to negotiate in good faith and say that you guys have violated our patents and it was proven in court, and we would like for you to compensate us for this patent infringement.

I would not say Qualcomm bullies but they do have patents so they want to get paid as that is the majority of their business. If you take a look at how much they charge, I believe it is almost 3-4% on the royalty charge, that isn’t a lot,...
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algorithmplus

Jun 10, 2007, 8:08 PM
I think you also see a situation where Qualcomm knows it violated Broadcom's patent, but it doesn't want to pay up.
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nextel18

Jun 10, 2007, 8:49 PM
Well the jury did fine Qualcomm $20m (probably include 3x damages) to Broadcom for violating three other patents.

I think it is horrible when companies violate patents, and should be compensated, but with Broadcom and others like Nokia, it is very difficult to negotiate in good faith that will help all parties to get money. I have been hearing some numbers of what Nokia wants for their license with Qualcomm and what Broadcom wants for these patents in question. Frankly, Qualcomm will never allow it because it will hurt them too much. Not sure if you know but Qualcomm does not have a very high royalty rate charge. Moreover, look at the global industry’s revenue and look at theirs.

I am just upset at Broadcom, Nokia, and others who are...
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jerry 12

Jun 10, 2007, 8:51 PM
katrina said:
My problem with the situation is that I firmly believe if Qualcomm were in Broadcom's position, they would be doing exactly what Broadcom has done. It is my belief that Qualcomm has a history of bullying others into paying crazy royalties on pantents and its time they get a taste of this.

amen to that they are bully
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nextel18

Jun 10, 2007, 8:57 PM
Well I think if someone owns a patent they cannot be a bully but has to be compensated if using it. Qualcomm charges 3-4% depending on how many licenses and many other factors, but these companies like Nokia and Broadcom want Q to charge a lot less than that. Qualcomm would not do it because it would hurt them a bit. If you spent billions of dollars and a lot of your business has to deal with royalties from chips you would want fair compensation too.
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algorithmplus

Jun 10, 2007, 8:07 PM
Now, if I'm not mistaken, there are HSDPA chips out there that do not infringe on Broadcom's patents. That could be for a number of reasons:

1) Other companies, such as Nokia, had worked out arrangements to license the patented technology in question from Broadcom

2) Some HSDPA chipsets do not use the patented technology in questions, but use a "work-around" that could take Qualcomm and other manufacturers up to two years to implement.
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nextel18

Jun 10, 2007, 8:45 PM
Very interesting points. I am hearing a lot more chatter through the channels I am talking to that has been discussing that Apple, Nokia, and Broadcom are teaming up against Qualcomm to try to destroy Qualcomm. It looks like that is the case. Shall be interesting.
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algorithmplus

Jun 12, 2007, 6:08 PM
I would expect Ericsson would be happy about what was ruled against Qualcomm right now. Qualcomm and Ericsson do not have a good history together.
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nextel18

Jun 25, 2007, 5:25 PM
No one has a good history in this environment. Look at their histories.
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algorithmplus

Jun 10, 2007, 8:02 PM
nextel18 said:
With regarding the Gov’s look out for consumers we hope so and that is why I think they should veto, well Pres Bush should, because this will destroy a lot of companies and hurting the Gov. I do like that the Pres has this veto power when it comes to something as serious as this. Congress could overturn the Pres if they have more than 2/3 of the vote. (During a Veto.)


I think if the GOV would invalidate *ALL* patents, including Broadcom's and Qualcomm's, then *that* would be good for consumers.
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nextel18

Jun 10, 2007, 8:41 PM
I highly disagree. If patents were not established and issued innovation will not happen.
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algorithmplus

Jun 12, 2007, 6:10 PM
And, the maximum life of a patent should be shortened as well. Technology is moving at such a rapid pace that the previously established life of a patent (and one time renewal) far exceed what would be fair to the marketplace.
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nextel18

Jun 25, 2007, 5:03 PM
Perhaps but if the life of the patent was shortened there will be a lot of difficulty perhaps for further innovation.
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wfine81

Jun 7, 2007, 10:24 PM
If this turns out to be a political conversation I want in! I have a few things to say!
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donovansmith

Jun 8, 2007, 10:37 AM
Since the ITC is part of the Executive Branch, the President, as chief executive, does have the right to reverse the decisions of the departments in his branch. Of course Congress also has oversight powers and makes the laws that regulate the Executive Branch, but Bush can overrule decisions made in his branch.
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renardlee

Jun 9, 2007, 10:46 PM
i agree, even though i dont agree with bush and his policies, this power that he has is constitutional and he is not overstepping the constitution if he veto's the ITC's injuction.
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jerry 12

Jun 10, 2007, 8:46 PM
Jayshmay said:
Bush has way, way, way too much power. Congress needs to take things into they're own hands!!!

then it would be a bigger mess that crowd in Washington came agree on anything. 🙂
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jmac32here

Jun 8, 2007, 6:42 PM
It'll be a minimum of 1 year on unable to bring in new phones.

Another step is for the carriers to switch technologies...cuz this has been going on since 2005 and will only get worse as this struggle continues
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