Qualcomm, Nokia Still Sniping - TheStreet

Qualcomm, Nokia Still Sniping

A chip licensing dispute has big implications for the stocks.
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A springlike day in New York failed to bring any sign of a thaw between cell-phone giant Nokia (NOK) - Get Report and wireless chip titan Qualcomm (QCOM) - Get Report.

An exec from Nokia, presenting Wednesday morning at the Bank of America tech conference in midtown Manhattan, said there has been little movement on licensing talks between the two companies. Nokia, the world's biggest maker of handsets, has a license for so-called third-generation WCDMA chips that expires April 9.

"We are working to try and reach an agreement," Nokia finance chief Richard Simonson said Wednesday morning. He said he "won't speculate" on progress but added, referring to the April deadline, "I don't see any change there."

Qualcomm spokesman Bill Davidson made a similar comment in an interview later Wednesday morning.

"April 9 is a long ways away," he said. He said he understands that Nokia wants to lower its costs but added, "This is a part of their business that they're going to have to pay a little more for."

An investor who is long Qualcomm allowed that nothing is likely to happen till the deadline is looming, but he emphasized the pivotal nature of the talks for Qualcomm investors.

"This is the cornerstone of the bear case on Qualcomm," said the investor. He said the stock, off fractionally Wednesday at $42.18, could go to $50 if the dispute is resolved or fall to $30 if the companies resort to legal action. He calls the state of negotations "a key sentiment issue."

Nokia slid 6 cents to $22.93.