As expected, the Bush administration upheld a U.S. International Trade Commission ban on imported 3G cell phones using QUALCOMM chips, set to go into effect Tuesday. In a statement, QUALCOMM said it will appeal the ruling and renew its request for a stay on the ban, adding that none of Broadcom's patent claims are valid or were infringed upon. In the meantime, QUALCOMM has been developing a software workaround with carriers, which it acknowledges could be challenged by Broadcom. Sprint is reportedly most at risk, but has been using the software workaround and is also appealing the ITC. U.S. Trade Representative Susan Schwab said a second carrier has reached a settlement with Broadcom, without providing details. The Wall Street Journal reports one person familiar with the matter said AT&T and Broadcom reached a licensing deal. Verizon Wireless agreed to pay as much as $200 million to Broadcom in a settlement reached in July to allow it to continue importing phones with QUALCOMM chips. Shares of QUALCOMM gained 2.5% to $41.78 during normal trading, but fell 0.7% to $41.50 in extended activity. Broadcom rose 1.5% to $33.44 in the regular session and added 0.6% to $33.65 in the after-hours.
Sources: Press release, Associated Press, Wall Street Journal
Commentary: Qualcomm Prospering From Sales Outside U.S., Despite Bush Rebuff • QUALCOMM Shares Up 2.5% on Q3 Beat and Revised Guidance • ITC Slaps Partial Ban on QUALCOMM, Shares Rally on Plans to Appeal
Stocks/ETFs to watch: QCOM, BRCM. Wireless carriers: VZ, T, S, DT. ETFs: BDH, WMH, IGN
Earnings call transcripts: QUALCOMM F3Q07, Broadcom Q2 2007
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
