Qualcomm Settles Antitrust Dispute With China for $975 Million
In addition, the settlement with Chinese regulators will enable Qualcomm to focus more of its attention on the issue of some licensees that the chip maker said have underreported product sales. Qualcomm officials have said they had reached an agreement with one of these partners, but during the conference call, Aberle said the underreporting is continuing with other vendors. The agreement with the NDRC already has boosted Qualcomm's financial picture, according to Aberle. The company increased the lower end of its fiscal 2015 revenue guidance, from $26 billion to $26.3 billion. He said that—assuming all sales by partners were reported—about 10 to 12 percent of products would be impacted by the new royalty fees. The settlement is welcomed good news at a time when Qualcomm is dealing with a range of challenges. The company in December announced it was cutting 600 jobs, and that was followed by reports that major customer Samsung had decided to use its own processor rather than Qualcomm's new 64-bit Snapdragon 810 in its upcoming Galaxy S6 smartphone due to overheating issues. During a conference call Jan. 28 to discuss the company's latest quarterly numbers, Mollenkopf said he was pleased with how the Snapdragon 810 was performing in the market, noting that there were more than 60 device designs based on the system-on-a-chip (SoC) in the pipeline, and more to come. However, he admitted that a top customer—he declined to way which one—had decided not to use the chip. Mollenkopf also said that with the next Snapdragon version—the 820—Qualcomm will return to leveraging its own custom 64-bit ARM-based CPU architecture, as it has done in the past. He said the company had used an ARM CPU for the Snapdragon 810 to accelerate Qualcomm's use of a 64-bit chip.
A few days after the conference call, a number of smartphone makers—including Microsoft, Motorola Mobility, LG Electronics and Xiaomi—threw their support behind Qualcomm and the 810.