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Qualcomm brandishes CDMA patents handbag

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"I sent my daughter to cooking school - it cost me $5000," we overheard one financial analyst tell a another while we waited for Qualcomm to take the stage for its Banc of America Securities Technology Week session yesterday. "And I got one meal out of it."

Kind of apt, we thought, as Qualcomm has spent a tidy sum on sending CDMA to cooking school, and is determined to get more than one night's dining out of its investment. And then some.

Anyone thinking that Texas Instruments' acquisition of CDMA rights might lead to a kinder, gentler licensing regime from Qualcomm soon had their doubts dispelled by president and COO Richard Sulpizio in San Francisco yesterday. The company's built much of its business on IP hoarding [shouldn't that be "the aggressive licensing of its CDMA expertise"? - ed.] and isn't going to start playing softball anytime soon.

Qualcomm is in the process of spinning its licensing business off from its chip business to capitalise on its patent arsenal. "We don't have a strong GSM patent porfolio, and we don't want reciprocal royalty," he said, apparently closing the door on the kind of IP horse trading that's standard telecomms practice.

"We're not willing to forego shareholder value in our royalty business in favour of our chip business," said Sulpizo. Qualcomm earned $209m from royalties in the last quarter, and has filed 1371 CDMA patents in all, with 950 pending.

Sulpizo said that 3G licensees would pay the same fees as they currently do for CDMA, assuming they already deal with Qualcomm. Bearing in mind that that's zero in Europe, you can see why Old World hackles rise. Europe has made the 2-and-a-half-G GPRS invesetment of course, and favours WCDMA instead of Qualcomm's preferred CDMA2000.

But Sulpizo is equally riled by the Europeans telling the Chinese to defer investing in 3G. Would the GPRS proposition delay CDMA?

"Absolutely, yes. The perception is that GPRS will be good enough. You've depreciated the investment in the base station ... It's like putting new ties and paint on a old car. It's cheaper now, [to upgrade the GSM infrastructure]" he said. "But eventually you have to throw that iron away." Europe does what Europe does..." he mused.

While Europe ought to not get smug about its wireless lead, the rosy picture of inevitability that Sulpizo paints for CDMA-powered 3G is nonsense, of course. In the US, AT&T is upgrading TDMA networks to EDGE, a two-and-a-halfG option. But with US wireless being US wireless, the word EDGE covers a number of quite different technologies. There's EDGE Classic, or GSM. OR EDGE Compact, which is GPRS within TDMA. (Compact means aggressive reuse of limited frequencies. ) Well we guess convergence has to start somewhere... ®

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The CDMA FAQ

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