GristyMcFisty used our news submit to tell us about this very interesting development concerning Philips, royalty payments, China and Wal*Mart.  Here is a snippet from the DigiTimes article.

In response to concerns from Philips over royalty payments for its DVD patents, US retail giant Wal-Mart has shifted its OEM orders for movie DVD discs from existing partners in China to a few second-tier manufacturers of pre-recorded optical discs in Taiwan, according to the Taiwan makers. Wal-Mart sells VCD and DVD discs at its retail outlets and also has some copyrights for movies produced by some independent companies. Since Wal-Mart emphasizes price, its VCD and DVD discs are mostly produced in China, the makers indicated. However, China-based OEM makers for Wal-Mart are not willing to pay royalty fees to Philips, which is the patent owner, the makers pointed out. The China government wants to negotiate royalty payment with Philips on behalf of China-based makers rather than let Philips talk directly with individual makers. Since the makers were being protected by the government, Philips instead exerted pressure on Wal-Mart to protect its patent rights, the makers noted.Consequently, Wal-Mart began seeking Philips licensees in Taiwan in June of this year. A few second-tier makers were selected, including Homenema Disk, Feng Sheng Technology, Pandisk Technology and Delphi Technology.

Living in the US and also working here, I know only too well how much influence Wal*mart can have on business. For many industries, Wal*Mart may very well be your number one customer. For China to lose an outlet that is moving 15 million discs a month, which is an average estimate, that has got to sting. In fact, according to the article, these second tier makers contacted so far, cannot even keep the pipe full! Something tells me Philips will win this little war. Good for them. Nice find Gristy!

Source: DigiTimes