Qualcomm Logo 2016 AH (3)

Qualcomm Inks License Contracts with Many Vendors in China

January 11, 2016 - Written By Alexander Maxham

Qualcomm had a pretty rough 2015. Partially attributed to their newer processors having issues with heat (mainly the Snapdragon 810, but also the 808 and 615), along with losing their biggest customer, Samsung. The company also faced some stiff fines in China last year, as well as losing quite a bit of market share in the world’s largest mobile market. Qualcomm has lowered the pricing for their processors, modems and other components for China, the company is still able to collect royalty payments in China. However it’s based on the production cost of entire handsets. Before it was based on unit prices of single chips. That’s a big deal for Qualcomm, as they are still able to rake in royalty payments, and for some companies that’s a big deal (for Microsoft, their royalty payments from Android is what keeps Xbox and Skype in business).

The company has been able to sign license contracts with many of the larger smartphone makers in China. This includes TCL, Qiku, Haier, K-Touch, Huawei, ZTE and Xiaomi. All of which use Qualcomm already, in some areas, but also use either their own processors (Huawei’s HiSilicon for example) or local rivals, MediaTek and Spreadtrum Communications. Having added these vendors to their list, we are likely to see a good number of mid-range and high-end smartphones in China, launch with Qualcomm’s components inside. It’s important to note here that these contracts between these vendors and Qualcomm are not confirmed. But these have been noted from the Taiwan handset industry. So we’ll take this with a grain of salt for now.

 

A pretty big deal for Qualcomm. After having to lay off a number of employees in 2015, and seeing their profits shrink. Having their components enter China again is a big deal. China is currently the largest smartphone market, followed by India and the US. Being big in both the US and China means big profits for Qualcomm. So we’ll have to wait and see what Qualcomm can get out of this. But it is good news for the company, especially if the Snapdragon 820 turns out to be as good as Qualcomm has touted it to be.