Qualcomm will have to make some changes to the way it licenses its patents in China, but the regulators have not mandated a more serious change to the firm’s business model
Qualcomm’s battle with Chinese regulators over charges of monopoly practices has finally come to an end after more than a year of disputes. The US-based chip maker announced overnight that it will pay a US$975 million fine as part of the settlement.
Despite the large sum of money involved, the settlement is not as severe as some had feared, reports the Wall Street Journal. Qualcomm will have to make some changes to the way it licenses its patents in China, but the regulators have not mandated a more serious change to the firm’s business model.
It’s all been worked out
Qualcomm, which is the world’s biggest chip maker, thanks to the global smartphone boom, has been under investigation by China’s National Development and Reform Commission since November 2013 as part of the nation’s Anti-Monopoly Law.
China currently has 520 million active smartphone users, and about 400 million new smartphones are shipped to consumer by brands each year. Since many smartphones use Qualcomm’s processors, China accounted for half of the chip maker’s revenue in its most recent earnings report.
“We are pleased that the investigation has concluded and believe that our licensing business is now well positioned to fully participate in China’s rapidly accelerating adoption of our 3G/4G technology,” said Derek Aberle, president of Qualcomm, in the company’s announcement (PDF file here).
Steve Mollenkopf, the CEO of Qualcomm, added that the company is “pleased that the resolution has removed the uncertainty surrounding our business in China.”
This post was originally published in Tech in Asia