Qualcomm: Settlement Talks In Progress; Earnings Delayed

Its long-running intellectual property battles with Broadcom may be nearing a resolution, wireless technology provider Qualcomm said.
Advanced settlement discussions with Broadcom "regarding a global settlement of all disputes between the parties" are under way, Qualcomm said in a statement late Wednesday. And for that reason, Qualcomm is delaying the release of its earnings statement from Wednesday until next Monday.

"No assurance can be given that the Company and Broadcom will be able to reach agreement on the terms of a global settlement," Qualcomm stated on its "Neither company will comment further at this time."

The two companies have been in bitter litigation for several years over intellectual property issues. Qualcomm has a massive portfolio of wireless patents and Broadcom has developed an impressive patents portfolio of its own in recent years. While Qualcomm hasn't been publicly forthcoming about its licensing and royalty financial figures, industry sources have estimated it receives from 4% or 5% of the value of most cell phones in which its patents are used.

Broadcom may have another reason for settling now with Qualcomm. It has made an unsolicited cash offer of $764 million to acquire Emulex and it may have to brace for a long and drawn-out hostile battle with the Fibre Channel storage networking firm, which said earlier this week that it was "reviewing" the Broadcom bid. Broadcom has some $1.95 billion in cash reserves, and it could have to pay Qualcomm if the settlement discussions are concluded.

Just last summer, Qualcomm reached an agreement with Nokia -- the world's largest supplier of wireless handsets -- after many months of intellectual property battles. Nokia won some skirmishes leading up to its settlement with Qualcomm last summer, but in the end Qualcomm got the settlement it sought.

Since the Qualcomm-Nokia settlement, the two firms have been cooperating closely on the development of new handsets.

Qualcomm said any agreement with Broadcom would likely have an impact on its second-quarter financial results.

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