Did The Game Just Change For BlackBerry?

| About: BlackBerry Ltd. (BB)
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Summary

BlackBerry awarded $815 million in a contract dispute with Qualcomm.

The award is binding and not appealable by Qualcomm.

This changes things for BlackBerry.

Early this morning, BlackBerry (BBRY) announced that it had won $814.9 million in a contract dispute with Qualcomm (NASDAQ:QCOM) that was in arbitration.

Last year, the two companies had agreed to abide by the decision made in an arbitration hearing which was held two weeks ago in San Diego.

"BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners," said John Chen, CEO of BlackBerry. "We are pleased the arbitration panel ruled in our favor and look forward to collaborating with Qualcomm in security for ASICs and solutions for the automotive industry."

BlackBerry has long claimed that it has been overpaying Qualcomm for royalties related to Qualcomm patents. I guess, the arbitration panel in San Diego agreed with BlackBerry.

Question is, with other manufacturers of cell/smartphones (think Samsung (OTC:SSNLF), Apple (NASDAQ:AAPL) et al) also claiming the same thing regarding Qualcomm overcharging for patents, is Qualcomm's goose cooked for now?

From where I sit, this opens the door for the other OEMs even wider in their own royalty dispute cases against Qualcomm and more than likely should motivate Qualcomm to lower the royalty rates it charges OEMs going forward and also settle those pending cases as fast as possible as well.

Secondly, Qualcomm should also raise the offer price for NXP Semiconductors (NASDAQ:NXPI) in order to close that deal as quickly as possible which will allow the company to diversify its product portfolio as quickly as the acquisition is completed.

Finally, this is a huge game changer for BlackBerry. In my opinion, with more than half of BlackBerry's current market capitalization now in cash (including the money due from Qualcomm), buying the shares even after this morning's pop is more than likely a good idea.

Words to the wise.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in BBRY over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.