Qualcomm must share with Korean partner

Because the International Court of Arbitration of the International Chamber of Commerce sided with the Korean Electronics and Telecommunications Research Institute over a royalty dispute, Qualcomm must endure a one-time charge of $80 million in its first quarter, which ended this month.

The $80 million includes additional royalties that Qualcomm must share with ETRI as well as the interest and other costs that accrued during their joint development agreement. In addition, Qualcomm has to continue sharing a portion of the royalties it receives from selling of certain CDMA equipment in Korea.

Despite the fact that Qualcomm reportedly was disappointed by the decision, this was not a devastating blow for the company, said Rudy Baca, a vice president and global strategist for The Precursor Group.

Financially, the decision is not expected to have much of an impact on Qualcomm’s revenue and earnings in future quarters. The decision also is not expected to affect Qualcomm's ability to collect royalties on CDMA, WCDMA or other CDMA-based standards.