Wireless chip vendor Qualcomm today said it continues to face tough business conditions in China. It also revealed fresh investigations against its trade practices in Europe and U.S.
Qualcomm in China
Qualcomm’s main worry is about the 11-month-old antitrust investigation in China by the National Development and Reform Commission (NDRC). This probe could force Qualcomm to offer at least $1 billion as a penalty towards settlement or make concessions that would hurt its profitable business of charging royalties on phones that use its patents.
Qualcomm, announcing the fourth quarter result, said that that certain licensees China, its main mobile market, are not fully complying with their contractual obligations to report their sales of licensed products. Certain licensees are underreporting a portion of their 3G/4G device sales, while Qualcomm is also facing a dispute with a licensee.
Qualcomm fears that unlicensed companies may seek to delay execution of new licenses while the NDRC investigation is ongoing.
Though the chip vendor expects 3G/4G device shipments of nearly 1.3 billion and 1.5 billion in 2014 and 2015, respectively, the reported shipments will be nearly 1.04 billion to 1.13 billion due to these concerns. Qualcomm did not share forecast for 2015 shipments for 3G / 4G devices.
Qualcomm faces probe in Europe and US
A Reuters news report on Qualcomm said the San Diego-based company faces a new probe by the European Commission about rebates and other financial incentives in the sale of its chips. Another preliminary investigation by the U.S. Federal Trade Commission concerns a potential breach of licensing terms. Qualcomm said it was difficult to predict the outcome of the U.S. and European investigations.
The European probe is separate from a four-year-old complaint to the European Commission from a subsidiary of Nvidia over alleged patent-related incentives and exclusionary pricing by Qualcomm.
Qualcomm revenue
The chipmaker said its revenue rose 3 percent to $6.69 billion in Q4 2014 ended on 28 September.
Qualcomm net income grew 26 percent to $1.89 billion.
Qualcomm revenue for fiscal 2014 increased 7 percent to $26.49 billion, while net income grew 16 percent to $7.97 billion.
The chip vendor forecast revenue of between $26.8 billion and $28.8 billion for fiscal 2015.
Steve Mollenkopf, CEO of Qualcomm, said: “We are forecasting continued growth of global 3G / 4G device shipments in calendar year 2015, particularly in emerging regions. Our fiscal 2015 outlook reflects continued LTE leadership in our semiconductor business and is tempered by the issues we are facing in China related to our licensing business.”
Baburajan K
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