“Millions of new mobile phones containing certain Qualcomm semiconductors could be barred from import into the United States under a ruling issued Thursday by a federal government agency in a patent dispute,” Matt Richtel reports for The New York Times.
“Qualcomm said the ruling by the United States International Trade Commission, if it withstands an appeal, could prevent the importation into the United States of tens of millions of new mobile handsets designed for the Verizon, Sprint and AT&T Wireless networks,” Richtel reports.
“The agency ruled that Qualcomm, a semiconductor company based in San Diego, had infringed on a key patent belonging to Broadcom, a competing chip company based in Irvine, Calif., that is used in the design of chips made for advanced 3G, or third-generation, smart cellphones. Qualcomm said that it planned to appeal immediately to the federal court to block the ruling. The company also said that it planned to appeal to President Bush, whose trade representative, Susan C. Schwab, has 60 days within which to veto the ruling. The company said it sought “to avoid irreparable harm to U.S. consumers” and injury to the economy,” Richtel reports.
“‘This is tremendously significant,’ said David Rosmann, vice president of intellectual property litigation for Broadcom. ‘Qualcomm is either going to need to take a license or they will not be able the provide the next generation of handsets,'” Richtel reports.
Full article here.
[Thanks to MacDailyNews Reader “ChrissyOne” for the heads up.]
MacDailyNews Take: It’s obviously “Smash Any Carrier Not Named AT&T Wireless Month.” For, if there’s no settlement (which there probably will be), even without these so-called “advanced” phones, AT&T Wireless will have one “phone” with a Broadcom — not a patent-infringing Qualcomm — chip tucked safely inside: iPhone, bitch!
This is hugely beneficial to AAPL. If S and VZ are required to shelve their new phones scheduled for later this year, then that opens the door for AAPL to gain marketshare with its iPhone.
Of course, QCOM and BRCM could at some point come to a licensing agreement, or the court could lift its stay.
But even so, watch for a bump in AAPL today.
Great take, MDN.
” width=”19″ height=”19″ alt=”confused” style=”border:0;” />
It will either be settled or vetoed. Allowing such immense collateral damage is unacceptable. It would put the vampires we call “lawyers” in the position of extorting the entire population with their shenanigans. Still, I am glad Apple is not in the target zone on this one. Perhaps the FUD will drive business their way.
I have to admit, SJ is really a genius. Who could have foreseen this but him!:-)
Either they have a legal license to produce the chips or they don’t. If they knowingly violated a competitors license, then phoey on them, and their hand wringing about “harm to consumers” buncha hooey.
If they didn’t know they were violating a competitors patent, either they weren’t doing their homework, or they were sloppy/incompetent.. (assuming the patent violation claim is valid, which it seems likely based on this court ruling).
So boils down to either they got legally shafted by incompetent justice system (not impossible but not likely), or they screwed up. If it is the latter, they should just stop with all the phony appeals and open their wallets and pay their competitor for their mistake (assuming Broadcom is willing to settle, which they likely would given that the chips are already in phones, though no reason they have to settle cheaply).
watch out NOW!!!
What’s been missed in this article is
That if Bush doesn’t veto the ruling, it could take up to TWO YEARS for Qualcomm to make a work-around.
That’s two years of slow 2G phones and the best one available will be THE IPHONE.
56 million Sprint and Verison customers who use Qualcomm 3G chips will not be able to take advantage of new innovations, basically stuck with old phones if they decide to renew. Because the banning only applies to NEW phone imports, not presently selling ones.
So this could be a BIG WIN for AT&T and Apple.
The customer could have a choice, stick with Sprint or Verison, use a outdated phone with 3G, or a new phone with 2G or go with AT&T and get a 2G iPhone.
Most people buy a cell phone to make calls, 2G or 3G really doesn’t make a differernce. They want it cheap, slim and low cost every month.
The iPhone is non of these, but it can save certain people money. The Crackberry types.
“They want it cheap, slim and low cost every month.
The iPhone is non of these”
errr, what? it is not much more than the phones i watched every other teen texting with while on vacation last week, and if 11.6mm isn’t slim…. well, what are you using?!?
This is excellent news! Qualcomm is such a b/tch. Now they have to taste their own medicin. I hope that this takes 10 years instead of just two.
well, what are you using?!?
A RaZR right now.
The problem with the iPhone is not too much of the thickness, but the width and height, which makes it a little difficult to fit into a pocket.
By the time a cover is on it, the iPhone is just like a large capacity iPod, it’s too bulky to carry around comfortably.
Sure one can get a holster, but that gets bumped on everything.
I see scares of business-class folks everyday walking around with one OR TWO holsters for their phones. And if one uses the BlueTooth earpiece, then you wouldn’t even have to take it off the clip, so I really don’t think the size is that significant. A RAZR is just about the most uncomfortable thing I’ve ever tried to talk into, so I don’t see the big advantage there.
What I’m really curiously about is how the Earbuds-with-mic are going to work. If they work well I’d probably never hold the iPhone up to my face anyway.
“…it could take up to TWO YEARS for Qualcomm to make a work-around.
That’s two years of slow 2G phones …”
Why wouldn’t cell manufacturers simply switch to the Broadcom chips. It’s definitely a hit to QC, but the phone manufacturers don’t have to wait for QC to figure out how to get around Broadcom’s patent when they can simply go to the original source.
Qualcom is probably looking into their own IP portfolio to find something Broadcom has done to violate their IP. By the end of next month, they will announce a cross licensing agreement and the problem will go away.
All your phones are belong to us.
This ruling = no LG Prada for Verizon.
Not to mention the numerous other so-called “iPhone killers” they had lined up for the summer.
Apparently Verizon is (or was maybe) preparing for their biggest ever launch period of new phones between the months of July and August, one of which was rumored to include a Prada phone.
It would no doubt have a 3G Qualcomm chipset as one of the features Verizon marketed as leverage against the iPhone.
Oh, and one of those in the Verizon summer of “iPhone killers” was going to be a CDMA model of Motorola’s craptacular Q9 with a Qualcomm 3G chipset.
http://www.engadgetmobile.com/2007/06/06/a-look-at-verizons-busy-summer/
The GSM Motorola Q9 for AT&T coming in August likely had a Qualcomm chipset as well. It was going to be a big push for Windows Mobile 6.
Shucks.
AAPL did gap up on the news as predicted in pre-market, but as of midday is down about 1% from yesterday’s close. Traders obviously shorted the initial spike up in the shares.
The next catalyst for AAPL is the WWDC keynote, followed by the release of the iPhone on June 29, followed by Leopard in October. Then we have the runup into the Christmas buying season, and the buildup to MacWorld Expo in January 2008.
These catalysts will, assuming no nasty surprises, keep AAPL consolidating sideways, with some upward movement heading into MacWorld Expo.
If there are nasty surprises, either AAPL-specific or in the broader markets, then we could see a drop of 10% to 15%.
Why wouldn’t they just trade chipsets? Or is it a PowerPC vs. x86 type of deal and you can’t do that without completely redoing the OS?
It seems like this is a pretty big story for almost no one to be talking about it today. Hmmm…
Bitch! That was beautiful.
Give me a break, MDN. Lamest take in a while.
Oh my God! ChrissyOne said size doesn’t matter! Never thought I would see the day.
Of course Apple itself could adopt the Broadcom chip later in the year and not only have the best phone, but one of the few with 3G services available in the US as well. What a time for the phone manufacturers to stumble!
Was it perhaps an Apple core they slipped on?
Right now, at this moment, there is no solid competition for the iPhone, so what could handset makers do to compete?
Think about it… What factor can the other phone companies even compete on? None of them have a decent UI, and even the best of them only run WIndows, and those all blow. Without coming up with their own OSes, the only other thing they could say is that they were Faster or Cheaper.
And Faster just got banned.
This is seriously Forrest Gump-ish. All the other shrimp boats just got busted up, and Apple has the whole coast to itself.
Good thing ah put all mah money inta some fruit companee.
The markets rose this afternoon once news broke about X (US Steel) being “in play”, i.e. a candidate for a buyout. This raised the entire metals sector, which in turn prompted a short squeeze in the broader market.
AAPL too has lifted off its session lows, and is now back up to unchanged from yesterday’s lows. It will probably hover around this level for the rest of the trading day. (Friday afternoons are generally slow as traders take off early for the weekend.)
As I noted previously, barring any nasty surprises, sideways consolidation is the name of the game where AAPL is concerned. That’s what the price action in AAPL today, given all the broader market gyrations, is telling us.