$975m Fine for the US Chipmaker Qualcomm
US chipmaker Qualcomm ends a 14-months anti-trust investigation in China with $975m fine for its patent licensing practices. This is the biggest fine in the corporate history. Qualcomm will reduce the royalty on patents that are used in the mobile market in China. The move is certainly going to help Chinese smartphone manufacturers Xiaomi and Huawei, as BBC reports. Qualcomm is not likely to challenge the ruling that was violating China's anti-monopoly law, even though it is dissatisfied with the investigation results. However, it is satisfied that National Development and Reform Commission has approved of the company's rectification plan.
Qualcomm is the largest supplier of chips for mobile phones in the world. It has decided to split its 3G/4G patents to other authorizations in China, and the present licensees will be able to select new terms in 2015 as Telecrunch reports. The tech giant had been over doubts relating to its business in China. The company still continued to make investments there. It will now charge royalties based on the 65% of the selling price of phones in China. The steadily expanding high-speed 4G network in China makes it the largest smartphone market in the world. Qualcomm is the key player her and has half its global revenue of $26.5bn in China.
In order to resolve the accusations made by Chinese authorities, for violating the anti-monopoly law, Qualcomm has decided to compensate with a record $975m fine, thus terminating a 2-year fight for patents. Its shares were up by 3% after-market trading, as stated by FT.com. The US chipmaker was able to raise its revenue guidance to at least $26.3bn for fiscal year 2015. The firm also raised its profit and revenue estimate for the current fiscal year. The company now plans to focus their attention and resources on serving their customers and partners.
