Qualcomm Signs Patent License Deals With 3 Chinese Vendors
The new licensing deals also come a couple of weeks after Qualcomm officials and directors announced that they had decided against breaking the company in two following a months-long review of the vendor's corporate structure. Investor Jana Partners earlier this year had urged Qualcomm to considering options for increasing profitability and returning more money to shareholders, including possibly separating the company's chip-making and licensing operations. The company in July cut $1.4 billion in expenses—including slashing the workforce by 11 percent, changing executive compensation policies and restructuring the board in line with Jana desires. However, CEO Steve Mollenkopf said when announcing the decision to keep Qualcomm intact that "the strategic benefits and synergies of our model are not replicable through alternative structures. We therefore believe the current structure is the best way to execute on our strategy to build on our position in the ecosystem and deliver enhanced performance and returns." Qualcomm's businesses are tightly intertwined. The chip-making business drives revenues at the company, while the licensing unit generates the most profits, which support the R&D that results in more products that can be licensed. Qualcomm may have settled the antitrust investigation with Chinese officials, but the company still faces similar probes in such regions as the United States, South Korea and the European Union.
The vendor also is looking to bounce back from the problem of Samsung refusing to use the Snapdragon 810 system-on-a-chip (SoC) for its Galaxy S6 smartphone with the upcoming release of its Snapdragon 820, which will begin appearing in devices next year. Samsung reportedly will use the SoC in some of its upcoming Galaxy S7 smartphones.