Published in Mobiles

Qualcomm QTL made extra $500 million

by on26 July 2018

Partial payment from a disputed licensee

Qualcomm Technologies Licensing (QTL) has announced that a licensee in dispute with the company decided to pay it $500 million, something that heavily reflected on the QTL financial results for fiscal Q3 2018. This number goes on top of a good fiscal Q3 2018 where the company beat previous estimates.  

It is not a big secret that Qualcomm is in dispute with some big players, the most prominent being Apple, but this $500 million partial payment might signal that the negotiations continue in good faith. The amount in dispute goes back the to third quarter of fiscal 2017 and it is not a full amount of the due royalties.

Qualcomm didn’t announce the name of the licensee, but it's easy to suspect who that might be. QTL has previously issued  guidance that it is and expected to reach revenues between $0.85 billion and $1.05 billion but the $500 million payment sky pushed up the financial numbers all the way to $1.47 billion.

As a result of that expected 50 to 54 percent margin ended up being 72 percent margin. Here at Fudzilla we've always implied that Apple and Qualcomm and all other licensing disputes will end up in a settlement. One of the largest ones that Qualcomm settled was Meizu, in the last days of 2016. Since then, Meizu announced phones using Qualcomm chipsets. Some good came out of all that.

Qualcomm QTL also underlined that the payment does not reflect the full the full amount of royalties due under existing licensing agreements, but said it believed it is a positive step as it continues  negotiations in an effort to reach a resolution.

There will be more payments in the upcoming quarters but as Alexander Rogers mentioned, this is a dynamic negotiation and he things that things are going in the right direction. Alexander Rogers is executive vice president and president of Qualcomm Technology Licensing (QTL).

A few months back we had a chance to witness Lenovo, OPPO, vivo, Xiaomi, ZTE and Wingtech, announce commercial availability of standard-compliant 5G New Radio (NR) devices in 2019.

As part of this announcement we heard Lei Jun, the CEO of Xiaomi, who said that 5G licensing to Qualcomm is a good thing, as it enables the innovation necessary to take the industry to the next step. It was hard to believe that in a few years China companies managed to turn the mindset totally towards the fact that licensing is a big help to the licensee.

Bear in mind that QTL owns 130,000+ patents and patent applications globally and this comes from billions of dollars of investment in research and development as well as though acquisitions.

Last modified on 26 July 2018
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