Ouch: The Qualcomm Phone Ban
Qualcomm was hit by a sucker punch today, in the form of a ruling that barred the importation of any new cell phones with certain computer chips. This doesn't include phone models that have already been released in the USA - only future handsets.
Motorola and LG are two mobile phone manufacturers that use Qualcomm's technology. The ruling could delay Motorola's RAZR2 and LG's Prada phones set to be released later this summer.
The U.S. International Trade Commission (ITC) found that the chips were infringing on patents originally filed by chief competitor Broadcom.
Shares of Qualcomm actually rose after the ruling, mainly due to fears of a larger-scale ban on all Qualcomm-powered phones.
Unfortunately, the future doesn't seem to bode well for the telecom company, since tens of millions of phones use the infringing chips - and a ban on these devices, well, leaves the phone carriers in the dust, so to speak.
The only bright spot is that Qualcomm can still ask a federal court to put the ban on hold while it appeals the decision. Otherwise, Qualcomm would have to either make a licensing deal with Broadcom or suffer the losses.
Source: "Banned: New Phones with Qualcomm Chips" - BusinessWeek
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