China’s National Development and Reform Commission (NDRC) has imposed a penalty of 6.088 billion Yuan or $975 million on Qualcomm.
The unprecedented penalty follows NDRC’s investigation of Qualcomm under China’s Anti-Monopoly Law and the settlement between the two parties. The commission today said the US-based wireless chip major violated the Anti-Monopoly Law in China.
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Qualcomm, succumbing to severe pressure from the Chinese commission, has decided to change its licensing deals in China. As a result, Qualcomm revised its revenue estimate. Nearly 50 percent of its revenue comes from China.
Qualcomm said it is disappointed with the results of the investigation.
Qualcomm revises conditions in China
The chip major will offer licenses to its current 3G and 4G essential Chinese patents separately from licenses to its other patents. Qualcomm will now be ready to negotiate cross license from a Chinese licensee.
Qualcomm will charge royalties of 5 percent for 3G devices and 3.5 percent for 4G devices for its 4G and 3G essential Chinese patents for branded devices sold for use in China.
The company said Qualcomm its revenues will be $26.3 billion to $28 billion for fiscal year ending September 27, 2015 against prior guidance range of $26 billion to $28 billion.
Diluted earnings per share will be $3.56 to $3.76 including an approximately $975 million charge against its prior guidance range of $4.04 to $4.34.
Baburajan K
editor@telecomlead.com
