Wireless Industry Analyst

Here is QualComm's official position on the ITC ban.

http://www.qualcomm.com/press/releases/2007/070607_disagrees_itc_decision.html

Notice the press-release positioning themselves as the champion of the US cellular industry while BroadCom is accused of using the IT ban "as a vehicle to attack the U.S. cellular industry." An obviously biased opinion of a miffed giant! Besides, they seem to pass much of the burden on the entire industry while it is really their own product and their own engineering expertise that is in question. Verizon, while signing in on the Presidential veto request has precisely made the same point.

It is apparently a knee-jerk reaction. A truly altruistic position would be to say, "we will pay up for the common good of the country and the industry. After all, it is our product that is in the midst of the controversy." Again, of all the companies in the industry, QualComm should understand IP and what it entails, and I am sure they do! They have never really given sweet deals to anyone as far as IP is concerned. So, BroadCom is only returning the favor.

The bad blood between BRCM and QCOM has festered for a while now and has peaked with the ITC intervention. The press-release rubs in where it hurts BRCM most, its failure so far to break into the WCDMA market. WCDMA was a prize they sought very vigorously, especially after the acquisition of Peter Van Rooyen's Zyray Corp., and the spinner chip. Grapevine has it that the chip spun last year was below par and failed a few basic tests. So, now while they are trying to sort issues with their product-line they are also more active in the 3GPP RAN1 and LTE. They may have, on the other hand, lost valuable time to market with their chips. The QualComm release ridicules this very point about the lack of performance of their chips and their subsequent failure to capture market.

From BRCM's perspective, however, it may be a win-win situation. If QualComm fails in its attempts to steer around the IP, then BRCM either gets substantial revenue and/or greater negotiating power at the cross-licensing discussion tables. Their IP stack just got a lot bigger and QualComm will have to budge on the royalties it seeks on a few of its basic patents. More importantly, this eventuality would have breached the tough walls of QualComm in this IP game and would signal more lawsuits from all the power-hungry players. On the other hand, if QualComm opts for a slower work-around without paying royalties, that may give BRCM the time to market for their chips. Vendor and operator confidence in their products however remains an unknown, though!

Do watch out for this space here as I bring more updates and views on this entire issue.