Mikey Campbell
Qualcomm posted quarterly earnings on Wednesday, noting a precipitous 89.7 percent decline in profits as the chipmaker faces a huge $778 million fine from Taiwanese regulators and an ongoing legal scrum with Apple.
For its just ended fourth fiscal quarter, Qualcomm posted net income of $168 million, down from $1.6 billion in 2016, reports Reuters.
Earnings per share came out to pegged at 92 cents, while revenue sat at $5.91 billion. The performance beat Wall Street estimates, bumping company stock in after hours trading.
Though Qualcomm beat the Street, it noted earnings "were negatively impacted as a result of actions taken by Apple and its contract manufacturers."
Qualcomm is embroiled in an intensifying legal battle with Apple, which now spans multiple jurisdictions around the world. Apple has continued to withhold patent licensing fees attributable to iPhone and iPad as the two companies duke it out in court.
Apple fired the first shot in January when it filed a nearly $1 billion suit against Qualcomm claiming unpaid rebates withheld over Apple's part in a South Korean antitrust investigation. In its suit, the iPhone maker pointed to potential anticompetitive practices, saying Qualcomm exploits its "monopoly power" to charge exorbitant licensing fees tied to critical smartphone IP.
Apple has since filed two lawsuits in China with similar accusations.
In April, Apple suppliers followed the tech giant's example and began withholding royalty payments on licensed Qualcomm IP. Further hurting the chipmaker's bottom line is a $773 million fine handed down by Taiwan's Fair Trade Commission, which found Qualcomm guilty of anti-trust and monopolistic tactics.
Following up on tough talk about Apple's suit, and findings by regulatory bodies, Qualcomm filed a countersuit earlier this year citing breach of contract. The chipmaker also lodged a complaint with the U.S. International Trade Commission, asking the agency to halt the import of iPhone and iPad products.
Most recently, Qualcomm filed lawsuits in Germany and China in an attempt to halt import and sale of iOS devices on the basis of patent infringement.
Qualcomm CEO Steve Mollenkopf has repeatedly played off Apple's advances, saying the legal battle comes down to IP pricing. Mollenkopf suggests Apple is using the legal process as a bartering tool for better licensing deals, saying he believes the spat will be settled out of court.
Reports this week suggest Apple is serious about replacing Qualcomm as a key component manufacturer. The company is supposedly trialling test designs of future iPhone and iPad hardware that replace Qualcomm modems with parts from Intel and MediaTek.
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22 Comments
Great job Apple. Qualcomm needs to be beaten below ground level.
If that kind of decline in revenue is attributed to Apple, Qualcomm has to have the most moronic management running the circus for alienating the one company that provides it the majority of its revenue.
Qualcomm, or should I say it's 'leadership' really does not seem to understand what the company does, or what they used to do, that mattered. Seems to me they are in much bigger trouble than they admit. It almost smells like Blackberry a few weeks after the iPhone introduction. They just spun BS. Hoping something would stick. Meanwhile the 'leadership' sell their stock holdings in their company and get ready for the collapse. Companies that think they are irreplaceable usually are.
If Apple experienced this revenue decline the stock would tank. QCOM... it bumps... oooookaaaaayyyy....
I’m no stock expert but how the f*** does their stock rise after this news?????
For the sake of the Qualcomm employees and stakeholders I hope Apple and Qualcomm can reach an amicable agreement and move on. I still see Qualcomm in a favorable light because I had an opportunity to work for Qualcomm a while back and was very impressed with their people and work environment. The people who are most at risk there are the ones who don't have a lot of sway in the decision making taking place at the upper levels of the company. The high level executives are probably set up pretty well with hefty compensation packages and golden parachutes, so no matter what happens they will have a soft landing. The rank and file technical workers, engineers, scientists, support staff, and middle managers on the other hand are much more vulnerable. Thankfully a lot of them have the technical and professional chops to find a new home with other firms if the execs decide to scuttle the QCOM ship with a protracted litigation against one of their bigger customers. Qualcomm's BOD should intervene.