Don't Get too Excited by the Qualcomm - Nokia Settlement

The Qualcomm - Nokia settlement doesn't mean too much, but it shows that both company's are in such bad shape that they can no longer afford to continue this ridiculous spat over a technology that may actually die with the advent of WiMAX.

Nokia, for one, just cannot compete with anyone. They make devices which are increasingly less relevant in a RIMM and IPhone world and are increasingly priced out by Samsung and other low cost manufacturers in the third world . As they try to move into other spaces desperately, the company looks much too much like a blind man trying to grab anything (ala Motorola when they grabbed Ed Zander as CEO). Sell it.

Qualcomm, on the other hand is a more difficult call. At least it is very well managed and has diversified more broadly. I am still very concerned about the upcoming battle with Intel which will be pushing WiMax across Asia and Latin America. I know that Barron's suggested that there would be increasing licensing revenue out of the IPhone, which would be a reason to hold the stock short term, but I think that the pop to a post-2000 high represents a good chance to sell if you have a long term perspective.

Note well, this is not a recommendation to short. I wouldn't short either of these.

Comments

soczie

July 25, 2008

The real risk to Qualcomm is that their licensing fees have always been very, very high for the telecom industry. Nokia wouldn't be settling unless Qualcomm were agreeing to much lower fees.

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Chris

July 25, 2008

AronLiv, you have absolutely no clue, do you? Nokia has 40% market share, and actually has a profit on their phones, which nobody else has. iPhone is like a ant on the ass of an elephant, claiming they are the next elephant.

Blackberry is pure business, and cannot win in any other segment, while Nokia is in all segment. Take a look at the E series.

iPhone is for 12 year olds, who wants to play games. The N series of Nokia sell 10 times more than iPhone, and nobody seems to have even checked. N95, one of about 10 different N models has sold twice as much as iPhone to-date, and now the N96 is coming.

How you can claim any of the above, after Nokia results. You are amazingly ignorant. Note that WiMax is 100% involved in WiMax, and any other wireless technology. WiMax will not be rolled out in volume until mid 2009, or even later. Until then Nokia and Qcom will continue selling the technology that is available.

Another idiot blogger who thinks the market=USA.

Get offline, moron!

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correcion...

July 25, 2008

NOKIA is 100% involved in WiMax

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Sam

July 25, 2008

Well said Chris! Can't agree with you more. This idiot blogger doesn't have a clue about wireless technologies nor about the business.

WiMax is highly unproven. LTE is a physical layer add on to a system of wireless technologies in use (3gpp). CDMA based technologies on the other hand (3gpp2) is marching towards a slow death as there is no evolution on top of EV-DO. WiMax has to compete with a world of proven LTE systems. There may be a market for fixed access using WiMax but it doesn't have much of a shot against 3gpp. Just look at the Sprint - they have a history of making all the wrong choices. Now they choose WiMax.

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bob

July 26, 2008

"Nokia, for one, just cannot compete with anyone."

That is absolutely ridiculous. Nokia has been gaining worldwide market share every quarter for over 2 years and is the worldwide leader in cell phone market share.

It seems that someone is losing big time in competition with Nokia.

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