Qualcomm’s fight against its US chip ban takes a hit, as the Bush administration sticks by the ITC’s decision. Earlier, Qualcomm was really hoping that federal intervention could get them back in the saddle, but it looks like they’ll have to find another way around the issue. The ban is on select power management chips, so they can still do business in the US (heck, they’re the number one chip maker), but this is still a serious blow. While more appeals are likely to follow, sooner or later Qualcomm will run out of authorities to turn to. We’ll keep you posted on what happens next in this ongoing struggle.
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With all the legal troubles that Qualcomm has been embroiled in lately, it was a bit of a suprise to still see the big Q at the top of the list of mobile chipset suppliers for Q2 2007 (Qualcomm had overtaken Texas Instruments for the number 1 spot last quarter). Then we remembered that, until things change, Qualcomm is still in every CDMA BlackBerry (as well as pretty much everything else CDMA). Accordingly, analyst iSuppli agreed with us:
“Qualcomm took the top spot on the strength of healthy growth in EvDO and WCDMA baseband chips,” said Francis Sideco, senior analyst, wireless communications, for iSuppli. “This achievement caps a sustained period of gains for Qualcomm.
While this is good news for Qualcomm, it should be noted that Texas Instruments reported a big upswing during its mid-quarter update, possibly related to customer fears over Qualcomm’s future.
During a conference call yesterday discussing his company’s quarterly results, Qualcomm’s CEO, Paul Jacobs, said that the company has been unable to resolve its messy patent dispute with Broadcom because a deal would hurt its licensing business. Jacobs told investors that Broadcom wants its customers to be exempt from paying Qualcomm licensing fees for a large chunk of its intellectual property portfolio as part of a settlement, which Jacobs claimed was unacceptable.
Considering that Qualcomm has lost its last two court cases against Broadcom, this might simply be conference call posturing. However, things get trickier when Verizon’s recent deal with Broadcom is taken into account. Verizon is set to pay Broadcom a licensing fee, Verizon’s CEO said he would seek a way to receive compensation for the payments, which many have taken as an expectation that Qualcomm would end up footing the bill. Sounds crazy, but Verizon is Qualcomm’s largest carrier customer, and while no deal is in place, Qualcomm brass has already made overtures about supporting their “very important customer”.
In no way is this messy story over yet. Keep hitting BBCool and we’ll continue to fill you in with all the juicy details.
Sprint and Qualcomm might be getting chummy to slug it through this power management chip ban in the U.S., but Verizon’s going with the other side, and is liscencing Broadcom’s opposing patents for $6 per 1xEVDO device. Broadcom stands to make up to $200 million from the deal, maxing out at $40 million per quarter. With that, it sounds like everybody’s got their tag teams set up and the battle lines are drawn. In the red corner, we’ve got Qualcomm and Sprint, in the blue corner Verizon and Broadcom. Bush has sent an aide to look over the International Trade Comission ban, which could end the fight early if in Qualcomm’s favour, and should have an answer by August 6th.
Yesterday’s BlackBerry 8830 release was just as telling as we had thought. Not only is Sprint carrying a Qualcomm processor in the BlackBerry World Edition, but it looks like the two companies will be working together to find an alternative technology in case the ban on certain chips can’t be stayed. If the embargo sticks, then Qualcomm’s future EVDO and WCDMA chips would need some serious reworking to get over the border. As is, some of Qualcomm’s chips are stepping on a Broadcom power management patent, forcing Sprint to use a temporary software patch to keep their devices legal in the U.S.
Sprint product manager Brita Horton said in an interview that the company would be unaffected by the ban and can bring out as many new devices as it wants this year as a result of a software update it received from Qualcomm. “Qualcomm gave us a software patch that … lets us keep shipping,” said Horton, who noted that while the software patch creates extra work for Sprint, it would not increase costs.
That’s nice that they’re trying to put on a nonchalant face, but if the dispute was really a non-issue for Sprint, they wouldn’t have any reason to help Qualcomm out. The reality is, this patch probably just disables the offending functionality, which Sprint would rather keep than scrap.
Now that the BlackBerry 8830 has hit Sprint’s shelves we can see the unlocked SIM card was no joke, meaning you can swap out local SIM cards willy-nilly. Price is confirmed at $199.99 with a two-year plan. Most noticeably is the nondescript Qualcomm 3G logo on the back of the device, which is pretty interesting to see since the ban on some 3G Qualcomm chips. Might we be seeing more Qualcomm chips on BlackBerrys while they try to reposition themselves around Broadcom, let alone Nokia? Probaby, if this ban holds up.