EU: In Q we don't trust!

Monday, October 1, 2007

So, the EU has finally decided it will ramp up the anti-trust lawsuits against QualComm (QCOM). While it appears to be just another lawsuit, it has great significance in the context of the fact that most WCDMA/HSDPA growth will be in Europe. With some of the bigger handset vendors being EU-based, the case may well be biased towards the 6 companies that filed the case. The bottomline for QualComm is -
  • Royalties may go down from 5% to 2% of the handset ASP. Or at least that is what the anti-QualComm wants.
  • With Europe amounting for around 20% of the total handset market on an average, this in turn amounts to an estimated $4 billion in lost revenue ( at 90% operating margins) over the next five year
So, this will be a key-event to watch out for, and at the outset does not look like a positive one for the San-Diego based company.

Posted by Vijay Nagarajan at 11:26 PM  


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