14 DAY TRIAL // A federal government agency has decided to ban US imports of all mobile phones which include Qualcomm semiconductors due to patent row. This might result in profit falls for major wireless carriers in this country.
The handsets which come with Qualcomm chips are mostly distributed by AT&T Wireless, Verizon and Sprint Nextel networks. Moreover, the main purpose of these semiconductors is that of accessing data services such as internet downloads and video calls. The ban does not apply for mobile devices which have been imported into the US before June 7th, even if they are the same models as the ones which have been banned.
The problem with Qualcomm's chips is that it has violated patents which are actually owned by a rival company, Broadcom. The order of the US International Trade Commission will go into effect in 60 days, unless President Bush issues a veto.
"We believe the commission has overstepped its statutory boundaries and has not afforded due process to manufacturers and operators", said Qualcomm chief executive Paul Jacobs. Moreover, the company points out the negative impact that such a decision might have on the consumers of such technology. We are actually talking about 10 million such handsets which will be banned. That is more than enough for bringing serious damage to the US telecommunications market.
A further look into the future consequences makes it clear that such a decision might even lead to raises in the prices of mobile phones in the US. Mobile phone makers will have to switch to rival chip providers, which will cost them both time and money.
Verizon has already taken measures on this matter, as it has addressed to a federal court for asking it to block the commission's order. If this fails to work, they plan on calling on the White House to veto the ruling.