Qualcomm's forecasts show struggle for licence deals in China
San Francisco
QUALCOMM Inc's forecast for quarterly sales and profit fell short of some analysts' estimates, underscoring the chipmaker's struggle to collect technology-licensing fees for smartphones sold in China.
The company said it's facing tough negotiating tactics at phone makers in the world's most populous nation, as some companies there withhold payments and stop reporting shipments in an attempt to secure better terms. That led to the weaker outlook for the company's licensing business, its most profitable, sending shares down as much as 6.7 per cent in extended trading.
While the chipmaker said it's seeing better-than-expected demand from one of its largest customers for parts used in cheaper handsets, Qualcomm gets about 60 per cent of its operating income from licensing its mobile technology. That high-margin business fuels research and development in chips and enables the company to outpace most rivals in bringing new features to phones. The fallout from an antitrust investigation by Chinese regulators, settled earlier this year, is still hampering Qual…
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