Qualcomm holds fast in license talks with Nokia

Reuters.com reports that Qualcomm (QCOM) "said it does not plan to budge on the size of royalties it gets from Nokia (NOK1V.HE), and that the Finnish company stands to lose far more revenue than Qualcomm if their licensing talks fail.Qualcomm, which holds patents for its CDMA and W-CDMA mobile phone technologies, is in discussions with Nokia, the world's largest cellphone maker, which also owns patents, on extending a license agreement that expires in April 2007."

According to Qualcomm, it's in Nokia's best interests to resolve the licensing issue. The company claims "Nokia depended on the license pact for the generation of about $40 billion of its revenue 2005, compared to Qualcomm's roughly $3.3 billion revenue exposure. Qualcomm said Nokia's exposure would rise to $49 billion in 2006, while Qualcomm's would rise to between $4.3 billion and $4.4 billion, based on estimates."

Ed Snyder at Charter Equity Research said, "Qualcomm's clearly taking a hard-line position and letting Nokia know that its political maneuvering isn't going to get it a lower royalty rate."