Qualcomm's temporary reprieve

Olga Kharif
11 Oct 2006

So, who won‾ On Oct. 10, Charles Bullock, an administrative law judge at the U.S. International Trade Commission (ITC), came out with a ruling on the Qualcomm-Broadcom case, which has kept Wall Street in suspense for weeks. His initial determination wasn't a worst-case scenario for either Qualcomm or Broadcom: The judge said that while Qualcomm infringed on five parts of one Broadcom patent, it did not infringe on two other patents under review.


) but also Verizon Wireless and Motorola (


) investors up at night. A ban on ready-to-use phones would have been 'disastrous' for Motorola because it relies heavily on Qualcomm's chips, and Verizon (


) could have been stopped from selling phones based on Qualcomm chips in the U.S., says Paul Sagawa, an analyst with Sanford Bernstein.


) patent.



), and others"”'occur outside of the U.S.,' says Alex Rogers, Qualcomm's vice-president and legal counsel. Qualcomm's baseband chips (the chips the judge ruled to have infringed on the Broadband patent) allow the processor inside a phone to talk to other parts like the antenna and to regulate power supply. The chips are made by foundries like Taiwan Semiconductor Manufacturing (


) in Asia and assembled into mobiles by handset makers there, too. The only chips Qualcomm imports into the U.S. today are used for internal testing, Rogers says.

'S&P Upgrades Qualcomm to Strong Buy'


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