Nokia Could Lose Right to Use Qualcomm Chips in CDMA Cell Phones

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Nokia Could Lose Right to Use Qualcomm Chips in CDMA Cell Phones

6:40 am on April 21, 2006 | Category: Business, Mobile Devices

San Diego-based chipmaker, Qualcomm, has confirmed that its CDMA/WCDMA licensing agreement with Nokia will partially expire in April 2007, unless the two companies can agree on the terms of an extension.

“There is no certainty as to when we will be able to conclude an agreement or the terms of any such agreement,” Qualcomm said in a recent regulatory filing. “There is also a possibility that the parties will not be able to conclude a new or extended agreement by April 2007.”

Nokia confirmed Qualcomm’s comments, but wouldn’t go into detail about the ongoing bilateral negations with the chipmaker. A spokeswoman would only say that all talks “have been conducted in good faith.”

If the two companies cannot reach an agreement Nokia will lose the right to sell handsets that fall under most of Qualcomm’s patents. This would be a major blow for the mobile phone market’s CDMA business, and thus their already frail standing in the North American market.

Relations between the two companies are already strained due to a lawsuit brought by Qualcomm against Nokia late last year. Prior to that, Nokia and several other companies had complained to European regulatory authorities that Qualcomm was harming the 3G industry by charging excessive royalties for its wireless chips.