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November 06, 2009
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| Korea’s Samsung Electronics, the world’s No. 2 mobile phone maker, finalized a cross-licensing deal with U.S.-based Qualcomm, the world’s biggest maker of mobile phone chips, the companies said yesterday. Under the deal, Samsung will make a $1.3 billion down payment to Qualcomm to use its third- and fourth-generation wireless technology, including its code division multiple access technology. Samsung will also get access to Qualcomm’s third-generation wideband code division multiple access and fourth-generation orthogonal frequency-division multiplexing technology. The deal will also allow Qualcomm to use 57 of Samsung’s patents for mobile technology. Samsung will not be paid by Qualcomm for its patent usage, as Qualcomm’s licenses have a higher value. “This new deal is more favorable to us than the previous one,” said a Samsung Electronics official who declined to be named. Industry experts say that with the large-scale down payment, Samsung will be able to save on the amount of running royalties its pays to Qualcomm. Ordinarily, local mobile phone makers pay around 5 to 5.75 percent in running royalties to Qualcomm. The chipmaker also viewed this deal in a positive light. Qualcomm chief executive officer and chairman Paul Jacobs wrote that he is pleased to extend the company’s license agreement with Samsung. In July, Korea’s antitrust watchdog hit Qualcomm with its highest penalty, 260 billion won ($220 million), for unfair trade practices. The Korea Fair Trade Commission said Qualcomm has been charging handset makers higher royalties for CDMA technology when they buy modem chips made by companies other than Qualcomm. Qualcomm said that the deal with Samsung has nothing to do with the fine. By Cho Jae-eun [jainnie@joongang.co.kr] |
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