*** Is WCDMA Becoming Desperate? - WSJ Articles

[ski03]

Yes. WCDMA desperately needs a win given the continuing stream of bad news about the DoCoMo 3G rollout, repeated vaporware announcements, and implementation timetables that are constantly being pushed out years into the future.

No. Companies operating from a position of strength always slash their prices. It's a smart business decision.



A Wall Street Journal article 11/7/02 "Mobile-Phone Suppliers Court China, Developing Countries: Top Equipment Makers Would Cut License Price If Their Standard Is Picked" by David Pringle makes five interesting observations.

1. Nokia, Ericsson, Siemens and DoCoMo agreed to slash the royalties to less than 10% (possibly as low as 5% according to Nokia's CTO) of the sale price of phones and network equipment vs. previously estimated royalties as high as 25%.

2. Ericsson & Nokia can afford to throw away some licensing revenues but they need WCDMA to succeed at almost any cost.

3. Nokia & Ericcson claim to hold more than 50% of the WCDMA patents but total royalty costs are still expected to be about 15% even with the reduction.

4. Qualcomm alone collects royalties of 3-5% on WCDMA equipment.

5. Experts say that more than 100 companies have filed WCDMA patents as they try to improve their negotiating position in licensing discussions.


Here is the link to the Yahoo summary of the WSJ article http://biz.yahoo.com/djus/021106/2352001250_2.html



A Wall Street Journal article 11/1/02 "China's Schism on Cellphones Rocks the Wireless Industry" by H. Asher Bolande & Jesse Drucker had a few interesting analyst quotes.

6. "I feel like it's (TD-SCDMA) being used as a bit of a bargaining tool to keep some of the foreign vendors honest," said Tim Luke, a wireless analyst at Lehman Brothers.

7. "I don't think they would hamstring their internal manufacturers by adhering to an island standard (TD-SCDMA) that is not used anywhere else, because then there's no export market." said Paul Sagawa, a wireless analyst at Sanford C. Bernstein & Co.



Competition is good. China seems to be doing an excellent job of negotiating the best deal possible. Competitive pressure may force Qualcomm to reduce its royalty rates which may lower handset prices.




A. Do you agree or disagree with the Wall Street Journal?

B. Does anyone know what technical issues are causing the DoCoMo 3G nightmare and why or why not they will easily be solved?

C. Are all of these WCDMA patents/patent filings the source of some of the implementation problems as companies try to get around the patents of Qualcomm and others?



I look forward to hearing your specific factual comments.