Qualcomm Collects $2.7B From Royalties In Korea

In March, I wrote about a technology called WIPI that the Korean government was pushing as a substitute for Qualcomm's BREW. At the time, I said that "WIPI is also an open standard, not controlled by any one company, which is attractive to Korean wireless carriers who want to minimize royalty payments, many of which go to San Diego (Qualcomm)." Well, some numbers just out of Seoul provide a little more information on how strong that motivation is. Korean companies, as heavy users of CDMA technology owned by Qualcomm, have sent about US$2.7B in royalties to the San Diego company since 1997. But I'm not in agreement with Korea on their beef. QCOMM has offered them a superior technology that has given them a technological advantage over other countries, and put them in a unique position to be experts in what has become the world standard for 3G, CDMA. Companies like Samsung and LG are growing strong on the back of CDMA, and stand to reap even greater future rewards. Apparently, a major Korean complaint is that Qualcomm gets a share of the total device price for CDMA handsets, including cameras, screens, smartphone ability, etc. even when this has nothing to do with the CDMA chipset. As the phones have gotten more complicated and expensive, QCOMM is getting more $$. Uhhh...well, who signed that contract on the Korean side? Instead of blaming Qualcomm for taking their money, blame the guys who didn't see this coming and signed anyway.

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