Fallout from the Qualcomm ban

ITC bans many 3G phones

The big news this week is the fallout from the U.S. International Trade Commission (ITC)'s ruling last Thursday banning the import of all new phones containing Qualcomm 3G chips.

The ban is the result of a 2006 legal decision that found Qualcomm in violation of patents held by rival Broadcom. Under the Commission's ruling, cell phones that rely on Qualcomm 3G chips, like high-end models from LG and Samsung, will be able to ship existing handsets into the United States, but new models are disallowed until the patent issues are resolved. The only good news for Qualcomm and its partners in this ruling is that the ITC decided to spare existing models.

As Sue Marek reports, Qualcomm's strategy is to fight the decision in court while lobbying for a long-shot Presidential veto. The two other options, of course, are to either settle with Broadcom and license the patents, or re-design the chips so that they don't interfere with Broadcom's patents. None of this is very attractive for Qualcomm: a settlement could be quite costly, and a chip re-design could take many months.

If the ban is allowed to stand, it is likely that this decision will have a profound impact on the industry as manufacturers scramble to update their devices. Some analysts are even saying the ban could lead some infrastructure firms to back off of 3G deployments altogether, instead holding out for WiMAX or some other technology.

It is also likely to be a boon for companies that do not rely on Qualcomm for chips. Particularly Nokia, which dominates the world handset market, but has had trouble making inroads in the U.S. - Eli

P.S. As I've mentioned before, FierceMarkets and FierceDeveloper will be producing the show daily at BREW 2007.  If you are planning to announce news at the BREW conference, please contact Sue Marek at [email protected] Also, we will be providing extensive coverage of the BREW conference on the FierceDeveloper website.