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Dec. 29, 2015, 8:18 AM
- Qualcomm (NASDAQ:QCOM) enters into a new 3G and 4G Chinese Patent License Agreement with home appliance and consumer electronics firm Haier. Under the terms of the deal, Qualcomm grants Haier a royalty-bearing patent license to develop, manufacture and sell 3G WCDMA and CDMA2000 (including EV-DO) and 4G LTE (including 3-Mode GSM, TD-SCDMA and LTE-TDD) subscriber units in China.
- Royalties due Qualcomm are consistent with the terms of the rectification plan submitted by the company to China's National Development and Reform Commission.
- Haier is a top global brand of consumer appliances. Founded in 1984, it has over 70K employees and generates over 136B yuan in annual sales.
Dec. 15, 2015, 4:54 PM
- For once, Apple (NASDAQ:AAPL) and Samsung (OTC:SSNLF) are on the same side of a legal battle: ParkerVision (NASDAQ:PRKR) has sued both companies, along with LG and Qualcomm (NASDAQ:QCOM), in an ITC complaint alleging infringement of four patents. Products declared to be infringing include the iPhone 6, the Galaxy S6, LG's G3, and the iPad Air 2. Import bans (could be a very tough sell) are sought.
- A ParkerVision suit against Samsung, Qualcomm, and HTC remains outstanding. In October, a federal appeals court (the CAFC) denied the company's petition for a rehearing of a non-infringement ruling related to a prior Qualcomm suit.
Dec. 15, 2015, 7:43 AM
- "The current structure is the best way to execute on our strategy to build on our position in the ecosystem and deliver enhanced performance and returns," says CEO Steve Mollenkopf.
- With FQ1 nearly complete, the company expects results to be at or modestly above the high end of previous guidance.
- A conference call is set for 8:30 ET.
- Source: Press Release
- QCOM +2% premarket
Dec. 14, 2015, 6:48 PM
- Two months after an ITC administrative law judge ruled Samsung (OTC:SSNLF) and Qualcomm (NASDAQ:QCOM) didn't infringe two Nvidia (NASDAQ:NVDA) GPU patents and deemed a third patent that they were found to infringe to be invalid, the ITC commission has upheld the judge's findings.
- Nvidia, whose Tegra processors directly compete against Qualcomm's Snapdragon processors and indirectly compete against Samsung's Exynos processors: "While today’s ruling ends this particular case in the ITC, we remain firm in our belief that our patents are valid and have been infringed and will look to appeal the ITC’s decision."
- Samsung has counter-sued Nvidia in both a Virginia court and before the ITC; those cases remain pending. Each company has also sought to have the other's patents invalidated by the USPTO.
Dec. 14, 2015, 2:22 PM
- Bloomberg reports Qualcomm's (NASDAQ:QCOM) board will meet in the coming days (and possibly announce a decision by week's end) to determine whether to split the company's chip division (QCT) from its IP licensing division (QTL), a move activist Jana Partners has urged the company to consider. Management is said to be "leaning toward keeping the company together."
- Qualcomm announced in July (along with major job cuts) it would explore a breakup and other strategic options. Since then, president Derek Aberle has suggested his company isn't crazy about the idea. QCT creates IP that's later licensed by QTL, while QTL's licensing efforts help keep QCT's royalty expenses down (due to cross-licensing deals).
- Separately, Morgan Stanley's Katy Huberty has cut her iPhone shipment forecasts in response to new checks. She now expects iPhone sales to drop 3% in calendar 2016 and 6% in Apple's FY16 (ends Sep. '16).
- Qualcomm has sold off, but less so than some other Apple suppliers.
Dec. 8, 2015, 8:20 AM
- Qualcomm's (NASDAQ:QCOM) antitrust issues grow as the European Commission lays out two charge sheets against the company. Qualcomm, according to the EU, may have illegally paid a major customer for using its chipsets, and engaged in predatory pricing with the sale of chipsets.
- The company could face a $2.7B fine - equal to 10% of total 2014 revenue - if found guilty of the charges. Earlier this year, Qualcomm paid $975M to make a Chinese probe into anti-competitive practices go away.
- Shares -2.35% premarket
Dec. 4, 2015, 8:30 AM
- Pacific Crest initiates coverage on the chipmaker with an Overweight rating and a price target of $64.
- The firm expects Qualcomm to regain market share with the launch of the Samsung Galaxy S7 next year.
- QCOM +0.9% premarket
Dec. 2, 2015, 2:24 PM
- Bloomberg reports Qualcomm (QCOM +5.4%) is facing a EU antitrust complaint related to suspected predatory pricing tactics that could hurt smaller chip rivals. Regulators are said to be prepping a statement of objections based on a complaint from app processor rival Nvidia (NASDAQ:NVDA).
- In July, the EU launched investigations into whether Qualcomm offered licensing/royalty discounts to clients on condition they exclusively buy the company's chips, and into whether Qualcomm squeezed out smaller rivals by pricing chips below cost.
- Shares have slightly pared today's gains, but remain up sharply in response to news of a licensing deal with Xiaomi, one of the Chinese license holdouts (Lenovo is reportedly another) that contributed to Qualcomm's soft FQ1 guidance.
- Qualcomm plunged two weeks ago after the staff of South Korea's Fair Trade Commission alleged the company's IP licensing practices are illegal, and recommended a fine and business practice changes.
Dec. 2, 2015, 8:01 AM| Dec. 2, 2015, 8:01 AM | 4 Comments
Nov. 20, 2015, 12:41 PM
- Ambarella (NASDAQ:AMBA) has rallied strongly on a day the Nasdaq is up 0.6%. 2.74M shares have been traded; the 3-month daily average is 2.97M.
- On the week, Amabrella is up 15%. The gains come even though top client GoPro (while up 2.5% today) is down 4% on the week after getting hammered on Wednesday due to a bearish Piper note raising pricing/margin concerns. Ambarella, which also sells to GoPro's (NASDAQ:GPRO) rivals and services various non-action camera markets, rose modestly on Wednesday in spite of GoPro's fall.
- Canaccord defended the video processor developer on Monday following a talk with CTO Les Kohn. Kohn argued rival solutions from app processor vendors such as Qualcomm, Intel, and Nvidia can't match Ambarella's offerings in terms of compression and power efficiency, and claimed 3x advantages for both memory bandwidth and power needs for H.264 video compression. Qualcomm (NASDAQ:QCOM) has tried to differentiate its drone offerings in part by providing system-level reference architectures; the company also recently unveiled an IP video camera reference platform.
- Ambarella's FQ3 results are due on Dec. 3. 12.4M shares (43% of the float) were shorted as of Oct. 30.
Nov. 19, 2015, 10:09 AM
- Cristiano Amon, the co-president of Qualcomm's (QCOM +2.1%) chip division (QCT) for the last three years, is now the division's sole president. Murthy Renduchintala, who has also been serving as co-president, will be leaving the company.
- The move comes four months after Qualcomm announced a restructuring that involves cutting 15% of its workforce. The company is coming off an FY15 (ended in September) in which QCT revenue fell 8% Y/Y to $17.2B. Samsung's decision to exclusively use its Exynos app processors in the Galaxy S6/Note 5 weighed, as did the iPhone's share gains (given Apple pairs Qualcomm modems and RF/power management chips with its A-series app processors).
- Qualcomm is bouncing a day after dropping 9.4% on news Korean regulators allege some of the company's IP licensing practices are illegal, and are recommending a fine and business practice changes.
Nov. 18, 2015, 10:17 AM
- The staff of South Korea's Fair Trade Commission (KFTC) allege some of Qualcomm's (NASDAQ:QCOM) IP licensing practices are illegal, and recommends a fine and business practice changes.
- Qualcomm insists its practices are in-line with global norms, and plans to challenge the staff's findings before the KFTC commission. The company has also been dealing with probes from the U.S. FTC and EU regulators; its Chinese dispute was settled in February. EU regulators have been examining the links between Qualcomm's chip and licensing ops; the FTC has been probing the potential violation of obligations to license patents under FRAND terms.
- The allegations come at a time when Qualcomm's relationship with major customer/Korean IT giant Samsung (OTC:SSNLF) has become quite complicated. Samsung opted to exclusively use its Exynos app processors in the Galaxy S6 and Note 5, and also used its own baseband modems in many versions. Qualcomm's Snapdragon 820 baseband/app processor (next-gen flagship, expected to be manufactured by Samsung) will reportedly go into at least some Galaxy S7 models. However, Samsung recently unveiled the Exynos 8890, a baseband/app processor with custom ARM cores and support for 600Mbps peak 4G download speeds.
- Qualcomm recently officially launched the 820, while promising 30% lower power consumption than the Snapdragon 810 (believed to have overheating issues), significantly improved performance via its custom Kryo CPU cores and Adreno 530 GPU, and up to 600Mbps download speeds via an integrated X12 modem. A recent FierceWireless article (has been taken down) indicated the X16, a modem delivering 1Gbps peak download speeds, would arrive in the summer of 2016.
- Shares have fallen to new 52-week lows.
- Update: Bernstein's Stacy Rasgon notes only some of the allegations made in a 2009 KFTC staff report regarding Qualcomm wound up being accepted by the commission. "At this point, we have no idea what the Commission will determine, nor what remedies might be imposed, and we would expect years of appeals before anything concrete (beyond fines) would occur. Nevertheless, the nature of the charges outlined in the Examiner’s report is likely going to cause additional angst among investors who are already worried about the long-term sustainability of Qualcomm’s licensing business..."
Nov. 9, 2015, 10:18 AM
- "Admittedly, we should have made this change when issues with China surfaced a year ago," says Nomura's Romit Shah, downgrading Qualcomm (QCOM -0.8%) to Neutral and cutting his target by $15 to $60. "[W]hile handset OEMs have long been dissatisfied with terms, every patent-related dispute spanning Europe, Korea, Japan and India resolved in favor of Qualcomm. We expected a similar outcome after Qualcomm settled with China’s NDRC in February. China though has proven to be a different animal."
- Citing Qualcomm's FQ4 earnings call remarks, Shah observes the company has seen slower-than-expected progress inking Chinese 4G licensing deals, that existing licensees are withholding/under-reporting payments as new contracts are being negotiated, and that share gains by Chinese OEMs that are often undercutting non-Chinese rivals are impacting royalty revenue.
- Qualcomm also stated on its call it's "actively preparing to enforce our agreements and/or take other actions against OEMs that are not negotiating in good faith, under-reporting royalties, or refusing to conclude agreements within a reasonable period of time," and insisted it has "a number of tools at our disposable that can be deployed both within and outside of China that we believe will ultimately resolve this activity." The WSJ has reported Lenovo and Xiaomi haven't yet agreed to new deals.
- Qualcomm is down 12% since providing soft FQ1 EPS guidance (due to royalty pressures) to go with an FQ4 beat last Wednesday. Shares trade for 12.5x an FY16 (ends Sep. '16) EPS consensus of $4.20.
- Qualcomm's results/guidance, details
Nov. 5, 2015, 9:10 AM| Nov. 5, 2015, 9:10 AM | 32 Comments
Nov. 4, 2015, 6:29 PM
- Qualcomm (NASDAQ:QCOM) has fallen to $56.75 after hours after providing soft FQ1 EPS guidance (and in-line revenue guidance) to go with an FQ4 beat. At the midpoints, the guidance implies 21% Y/Y revenue and EPS declines.
- The company notes stronger-than-expected MSM chip shipments offset slower-than-expected progress in striking new Chinese licensing deals in FQ1 (a deal with ZTE was recently announced). A revenue mix shift towards chips from (higher-margin) royalties pressures EPS. Though not providing full FY16 revenue guidance, Qualcomm is guiding for QTL (licensing division) revenue of $7.3B-$8B vs. an FY15 level of $7.9B.
- Key metrics: FQ4 MSM shipments totaled 203M, -14% Y/Y but above guidance of 170M-190M. FQ1 shipments are expected to total 225M-245M (-9%-17% Y/Y). Reported 3G/4G device sales (from which royalties are collected) rose 2% Y/Y in FQ4 to $58.3B. They're expected to total $50B-$58B (-11% to +3% Y/Y) in FQ1. Estimated 3G/4G device ASP fell to $207-$213 from $220-$226 a year ago. Global 3G/4G device shipments are expected to rise 11%-17% in 2015 to 1.52-1.6B, and 7%-13% in 2016 to 1.67B-1.77B.
- Business performance: QCT (chip division) revenue fell 25% Y/Y in FQ4 to $3.6B (hurt by iPhone share gains and Samsung's use of Exynos processors in the Galaxy S6/Note 5); segment op. profit fell 73% to $280M. QTL revenue fell 1% to $1.8B; op. profit fell 3% to $1.5B. GAAP R&D spend fell slightly Y/Y to $1.36B; SG&A rose 9% to $595M.
- Financials/restructuring: $2.2B was spent to buy back 37.5M shares, and another $1.4B has been spent on buybacks thus far in FQ1. Qualcomm ended FQ4 with $30.9B in cash ($25.6B offshore), and $11B in debt. Thanks to job cuts, the company expects non-GAAP SG&A/R&D spend to drop 6%-8% in FY16. Qualcomm aims to lower its spending run rate by $1.1B/year by the end of FY16, and to cut annual stock compensation by $300M.
- FQ4 results/FQ1 guidance, PR, slides (.pdf)
Nov. 4, 2015, 4:08 PM
- Qualcomm (NASDAQ:QCOM): FQ4 EPS of $0.91 beats by $0.05.
- Revenue of $5.45B (-18.5% Y/Y) beats by $240M.
- Expects FQ1 revenue of $5.2B-$6B and EPS of $0.80-$0.90 vs. a consensus of $5.79B and $1.08.
- Annual revenue/EPS guidance will no longer be provided.
- Shares -1.3% after hours.
Qualcomm Inc develops digital communication technology called CDMA (Code Division Multiple Access), & owns intellectual property applicable to products that implement any version of CDMA including patents, patent applications & trade secrets.
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