“By shaking hands with Qualcomm’s worst enemy, Verizon Wireless is not just undermining Qualcomm’s hard-line legal strategy, but setting a precedent that could have far-reaching consequences for wireless service providers, handset makers, and mobile-phone users for years to come,” Olga Kharif reports for BusinessWeek.
“On July 19, Verizon Wireless struck a licensing pact with Broadcom, the victor in a patent-infringement suit against Qualcomm that has led to an import ban on all new phone models containing Qualcomm’s next-generation wireless chips. Under the deal, Verizon Wireless agreed to pay Broadcom a $6-per-device licensing fee, subject to certain caps, to bypass the ban and continue importing new phones,” Kharif reports.
“Simply put, the arrangement is unprecedented. No wireless chipmaker, be it Broadcom, Qualcomm, or Texas Instruments, has ever charged a mobile-service provider for royalties on phones containing its components or technology. Until now, only handset makers, like Nokia, Samsung, Motorola, and LG have paid these licensing fees,” Kharif reports. “But the deal with Verizon Wireless, owned jointly by Verizon Communications and Vodafone, introduces a new model for licensing arrangements. Think of it as a shift in how royalties in the wireless industry are administered, collected, and paid—a shift that could leave U.S. consumers paying more for new mobile phones.”
Kharif reports, “The licensing deal could force rivals like Sprint Nextel to follow suit as the critical holiday shopping season approaches for an industry that’s already scurrying to compete with AT&T’s flashy new iPhone from Apple.”
Full article here.
Now all Verizon needs is a time machine set five years in the future, so they can go get a phone that’s even remotely comparable to Apple’s iPhone. Dr. Emmett Brown, paging Dr. Emmett Brown…
US$6/phone to Broadcomm?? And they said Apple’s demands were not reasonable ….
First?
Now all Verizon needs is a time machine set five years in the future, so they can go get a phone that’s remotely comparable to Apple’s iPhone. Dr. Emmett Brown, paging Dr. Emmett Brown…
They could just sell a phone with a time machine built in.
Now if there was just a way to get the flux capacitor and a 1.21 GigaWatt battery into a phone….
And Verizon’s Killer Phone?
The RAZR 2. Now, you can use Motorola’s crappy mobile browser at 3G speeds!!!
First Verizon all but sues Vonage out of business and now this. Sooner or later they will figure out how to lay claim to something in the the iPhone.
sent via iPhone
The error (and the irony) is that this is equivalent to ATT paying Apple (the handset provider) for the privilege of having its equipment work on the network. Verizon is not the first… but it is sure getting the shaft.
Serves ’em right, the bastards.
Oh it’s just so sad to watch, so sad.
The iPhone is “flashy.” That’s all. Just “flashy.” No other reason for the industry to “scurry,” it’s just “flashy.”
Wow, Verizon pulling a Universal Music.
Doesnt Qualcomm have somthing to say about this? these are THEIR phones that are infiringing on the patent.. my guess is Verizon was desperate for new phones and Qualcomm was screwed. I dont think this will last long as this effects almost all wireless carriers, and everyone is not, and should not have to pay to get around this.
Great, another reason for Verizon to raise their rates. Nothing better than feeling like a number and not a customer!
That’s like paying good money to make love to an ugly woman. No, thanks. I’m keeping my money.
Desperate times call for…..
Let the turmoil begin!
I think the author’s conclusions are wrong. This Verizon/Broadband deal is very unique and required to break a product supply logjam caused by Qualcomm’s legal issues with Broadcom. I think it was smart business on Verizon’s part to do the deal with Broadcom and get their flow of 3G phones moving, but I don’t think it is setting a new model of business dealings. Look for the Verizon vs Qualcomm lawsuit to recoup the Verizon’s costs. Until then, the price of these 3G phones will carry the $6 tariff and be paid for by the customers. But don’t look for Verizon to pay back customers after they obtain a settlement from Qualcomm.
why am I posting this from my iPhone?
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Because I can.
Verizon … You should have listened to Steve and just agreed.
I love to see Verizon stumbling again… who cares about a $6 fee when more more subscribers leave every day and they can’t stop the bleeding!
KenC said, “Wow, Verizon pulling a Universal Music.”
Verizon didn’t pull a Universal Music – Verizon is paying Broadcom a royalty, which is what Universal wants Apple to do for iPod and iPhone sales.
The example would be Universal paying Apple a $6 royalty for each iPod sold.
I’m sure Apple would be just fine with Universal paying Apple $$6 per iPod/iPhone.
“This sucker’s electrical. It takes 1.21 gigawatts…..”
I love the “take.”
I understand Nokia is fighting back.
http://snaps.snapsoid.com/~nokia_gun_phone