Wednesday, July 23, 2008

Nokia and Qualcomm Reach Agreement, Settle All Litigation

Nokia and Qualcomm reached an agreement covering various standards including GSM, EDGE, CDMA, WCDMA, HSDPA, OFDM, WiMAX, LTE and other technologies. The agreement will result in settlement of all litigation between the companies, including the withdrawal by Nokia of its complaint to the European Commission.

Under the terms of the new 15 year agreement, Nokia has been granted a license under all Qualcomm's patents for use in Nokia's mobile devices and Nokia Siemens Networks infrastructure equipment.

Further, Nokia has agreed not to use any of its patents directly against Qualcomm, enabling Qualcomm to integrate Nokia's technology into Qualcomm's chipsets.

The financial structure of the settlement includes an up-front payment and on-going royalties payable to Qualcomm. Nokia has agreed to assign ownership of a number of patents to Qualcomm, including patents declared as essential to WCDMA, GSM and OFDMA. The specific terms are confidential.

"We believe that this agreement is positive for the industry, enabling the market to benefit from innovation and new technologies," said Olli-Pekka Kallasvuo, CEO of Nokia Corporation. "The positive financial impact of this agreement is within Nokia's original expectations and fully reflects our leading intellectual property and market positions."

Separately, Qualcomm issued a statement raising its fiscal 2008 revenue and earnings guidance. Qualcomm now anticipates its Q4 revenues to be approximately $2.5 to $2.7 billion, with pro forma diluted earnings per share (EPS) to be approximately $0.49 to $0.51. The company anticipates the shipment of approximately 84 to 87 million Mobile Station Modem (MSM) chips during the quarter, compared to approximately 68 million MSM chips shipped during the year ago quarter. We estimate June quarter shipments of approximately 114 to 118 million CDMA devices (CDMA2000 and WCDMA) at an estimated average selling price of approximately $215 per unit. Approximately 89 million CDMA devices were shipped in the year ago quarter.

"Global demand for 3G continues at a rapid pace as consumers, operators and manufacturers benefit from a wide variety of competitively priced, feature-rich devices," said Dr. Paul E. Jacobs, chief executive officer of Qualcomm. "In calendar year 2008, we continue to see approximately 30 percent year-over-year growth for CDMA-based device shipments. The fundamental drivers of our business remain strong, and we are raising our fiscal 2008 revenue and earnings per share estimates."