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Nokia and Qualcomm may have finally solved their chip royalty dispute, with Nokia making an undisclosed up-front royalty payment to Qualcomm, but the stakes for both companies are much higher.
We were given a clue about this when, following the deal with Nokia, Qualcomm increased its sales forecast for the year, even before taking in to account the royalty payments from Nokia.
Nokia and Qualcomm, two of the most influential companies in the mobile industry, know they can only be as successful as their technology and behind last week's financial deal sits a straightforward technology swap which could potentially have wider repercussions for the introduction of 4G mobile technologies such as HSDPA, Wimax and LTE.
Both companies have strong patent portfolios and the scale of this agreement is an indication that both firms recognise and respect each other's strengths.
Inevitably the deal involved some sharing of that technology, which could be a worry to Qualcomm's and Nokia's respective competitors - TI, Broadcom, Motorola and Samsung.
Nokia has several patents essential to W-CDMA, GSM and, crucially, OFDMA, which lies at the heart of 4G wireless technologies LTE and Wimax.
Qualcomm's problem is that its strength is CDMA technologies used in the US and in a different form in the GSM 3G standard. But arguably CDMA is becoming less influential as a global technology and the deal with Nokia gives Qualcomm access to some interesting, not to say essential, 4G mobile phone IP.
The big focus for the next generation of wireless technologies looks like being LTE and Wimax which are based on OFDM access technology, for which Nokia holds a number of key patents.
This is a big deal for the chip firm, but it is not the end of the patent battles for Qualcomm, which still faces a challenging legal dispute in the US with fellow chip supplier Broadcom.
Qualcomm's willingness to settle its patent dispute with Nokia may spring from a wish to gain timely access to IP for next-generation LTE and Wimax technologies as much as from the desire to claim outstanding royalty payments.
Richard Wilson, Editor, Electronics Weekly
See also: Electronics Weekly's Focus on Wireless, a roundup of content related to wireless communications.
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