Qualcomm Incorporated (NASDAQ: QCOM), the world's leading developer of Code Division Multiple Access (CDMA) digital wireless technology for commercial wireless communications, today publicly announced its full support for convergence of CDMA proposals for the third-generation International Telecommunications Union (ITU) IMT-2000 standard.
Qualcomm strongly endorses the widely held view that a unified, global CDMA standard for wireless communications systems is in the best interest of manufacturers, operators and consumers worldwide. Qualcomm believes it is essential that the chosen IMT-2000 standard be equally compatible with both core GSM and TIA/EIA-41 networks that together will serve perhaps 1 billion subscribers before IMT-2000 systems are widely deployed. Qualcomm further believes it is essential that the new standard demonstrate improved performance over existing and evolved standards prior to final specification. Qualcomm continues to work with standards bodies around the world to achieve convergence of the different IMT-2000 proposals, including compatibility with the present CDMA standard, cdmaOne™, when performance is not compromised.
Unfortunately, as noted by the CDMA Development Group (CDG) in their May 7, 1998 statement, certain companies may want convergence of W-CDMA and Wideband cdmaOne to fail for competitive reasons. Companies may believe they are serving their own narrow self interest by imposing specifications, such as the choice of chip rate, that are purposefully incompatible with cdmaOne or with TIA/EIA-41. However, several of these specifications, if left unchanged, would result in networks that are less efficient in the use of spectrum and provide lower quality at higher cost for voice and medium rate data than the evolved capabilities of cdmaOne in commercial use several years earlier. Further information on details and advantages of a converged standard will be posted on the Company's web site at http://www.qualcomm.com.
As a result of its early and unique leadership role in CDMA, Qualcomm has an extensive CDMA patent portfolio with over 130 CDMA patents issued and more than 400 patent applications pending in the United States, Europe, Japan, Korea, China and elsewhere around the world. Qualcomm has informed appropriate standards bodies in writing in conformance with their policies that it believes many of these patents and patent applications are essential to the implementation of the leading CDMA proposals for the IMT-2000 standard, including the W-CDMA and Wideband cdmaOne proposals.
Qualcomm intends to license its essential patents on reasonable terms and conditions free from unfair discrimination for a single converged IMT-2000 standard, or, if not achieved, only for Wideband cdmaOne. It has so licensed over 55 manufacturers of cdmaOne equipment, including most major telecommunications manufacturers in North America, Europe and Asia, and has extended or is preparing to extend these bilateral agreements. Qualcomm intends to review its royalty rates within the context of the market size that will be achieved by a single converged standard. Although Qualcomm has recently entered into a royalty-bearing license agreement with Philips Consumer Communications LP that includes use of Qualcomm's patents in the W-CDMA standard, Qualcomm has no intention of generally licensing its essential patent portfolio for any IMT-2000 standard (such as W-CDMA) that is purposefully made incompatible with cdmaOne and TIA/EIA-41 without providing a material benefit to the industry.
Headquartered in San Diego, Qualcomm develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACS® system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, in conjunction with others, the development of the Globalstar™ low-earth-orbit (LEO) satellite communications system. Other Company products include the Eudora Pro® electronic mail software, ASIC products and communication equipment and systems for government and commercial customers worldwide. For more information on Qualcomm products and technologies, please visit the Company's web site at http://www.qualcomm.com.
Except for the historical information contained herein, this news release contains forward looking statements that are subject to risks and uncertainties, including timely product development, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis and those related to performance guarantees, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 28, 1997 and most recent Form 10-Q.
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