Nokia (NOK) has filed another suit against Qualcomm (QCOM), one more battle in the long war between the two companies. Nokia is Qualcomm’s largest customer, but has become sick of paying high licensing fees to the handset chip company.
Part of Qualcomm’s attempt for moving away from just being a provider of chips and licensed technology for handset companies is its new MediaFlow technology. The product allows for seemless delivery of multimedia, especially video, to cellphones. The process has been unreliable and cumbersome in the past.
Nokia is saying that a number of the concepts underlying MediaFlow violate its patents. If it can prevail, it could shut down one of Qualcomm’s most important new initiatives. Broadcom (BRCM) has already won a case at the ITC that prevents Qualcomm’s next generation chips from being shipped into the US, which cold damage cell service subscriber growth here.
If Qualcomm loses its rights to ship MediaFlow and many of its chipsets, its competitors have, to a large extent ,closed several of the company’s businesses. It is no wonder that Nokia’s shares are up over 70% during the last two years and Qualcomm’s stock is up only a little more than 10%.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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