Qualcomm (QCOM) has rejected a proposal for paying rival Broadcom (BRCM) about $1.5 billion to settle their patent dispute. The fight is keeping a number of new handsets, with Qualcomm chipsets, out of the US. The problem is causing headaches for handset companies like Motorola (MOT) who want to launch new phones and cellular companies like Sprint (S) who want to buy them.
Management at Qualcomm claims that it rival want to "destroy Qualcomm’s business model." That may be true, but, in the meantime, the battle threatens to do some serious damage to the cellular phone industry.
While Qualcomm and Broadcom fight over who pays what to whom in terms of royalties, it might be a good idea to hire an outside firm, perhaps an accounting firm, to temporarily put in place a payment system to get the flow of handsets with Qualcomm tech flowing back into the US. Give the system six months. If the two companies cannot reach an agreement, perhaps the handset companies will have weighed in a proposal that both chip companies would find acceptable.
The industry needs to buy some time, and neither Qualcomm nor Broadcom are doing anything helpful for their customers now.
Douglas A. McIntyre can be reached at [email protected].
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