Qual­comm signs up big China li­censees

China Daily (USA) - - BUSINESS - By BLOOMBERG

Qual­comm Inc, which has strug­gled to get paid li­cens­ing rev­enue in China, said it signed up phone­maker vivo Com­mu­ni­ca­tion Tech­nol­ogy Co, help­ing ce­ment its po­si­tion in the world’s largest phone mar­ket.

Vivo, the third-big­gest smart­phone maker in China, agreed to pay Qual­comm for tech­nol­ogy used in 3G and 4G phones, the US chip­maker said. The deal with vivo comes a week after Qual­comm se­cured a sim­i­lar agree­ment with Guang­dong Oppo Mo­bile Telecom­mu­ni­ca­tions Corp. The two com­pa­nies ac­count for about 30 per­cent of phones shipped by the top 10 Chi­nese phone mak­ers.

Suc­cess in China is cru­cial to CEO Steve Mol­lenkopf’s push to reignite growth at Qual­comm, which gets the ma­jor­ity of its profit from sell­ing the rights to use tech­nol­ogy that un­der­pins modern phone sys­tems. Reluc­tance by Chi­nese phone mak­ers to pay it dur­ing and after an an­titrust in­ves­ti­ga­tion there con­trib­uted to four con­sec­u­tive quar­ters of rev­enue de­clines at the San Diego-based com­pany.

In its most re­cent earn­ings re­port, Qual­comm re­ported a re­turn to sales growth and higher profit than an­a­lysts had pro­jected. In­creas­ing pay­ments from Chi­nese li­cens­ing hold-outs con­trib­uted to that boost, as did more chip or­ders from hand­set mak­ers there who are gain­ing mar­ket share from over­seas com­peti­tors such as Ap­ple Inc.

Qual­comm is pitch­ing its tech­nol­ogy to Chi­nese com­pa­nies to help its po­si­tion in that coun­try and, it says, help them when they try to ex­pand over­seas.

ZHEN HUAI / FOR CHINA DAILY

Mo­bile phones in­stalled with Qual­comm chips on dis­play at an in­dus­try expo in Nan­jing, cap­i­tal of Jiangsu prov­ince.

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