Qualcomm's second quarter earnings growth [electronic equipment China news]

01 Jul 2019

Qualcomm released its second-quarter earnings for the 2019 fiscal year on May 2, Beijing time. The report shows that Qualcomm's second-quarter electronic equipment China revenue was $5 billion, down 5% from $5.2 billion in the same period last year; net profit was $700 million, an increase of 101% from $300 million in the same period last year.

Specifically, Qualcomm’s second-quarter revenue from electronic equipment China and services was $3.753 billion, down from $3.936 billion in the same period last year; revenue from authorized revenues was $1.229 billion, down from $1.284 billion in the same period last year.

Qualcomm Cdma Technology Group's second-quarter revenue was $3.722 billion, down 4% from $3.897 billion in the same period last year, and was essentially flat compared to $3.739 billion in the previous quarter.

Qualcomm Technology Authorized Group's second-quarter revenue was $1.122 billion, down 8% from $1.219 billion in the same period last year and 10% from $1.18 billion in the previous quarter.

Qualcomm's total operating costs and expenses for the second quarter were $4.042 billion, down from $4.82 billion in the same period last year. Among them, the cost of revenue was 2.179 billion US dollars, lower than the 2.293 billion US dollars in the same period last year; the research and development expenditure was 1.308 billion US dollars, lower than the 1.402 billion US dollars in the same period last year.

Qualcomm expects electronic equipment China revenue for the third fiscal quarter of FY 2019 to reach $9.2 billion to $10.2 billion, an increase of 65% to 83% from $5.6 billion in the same period last year. For reasons of substantial growth, Qualcomm explained that it mainly comes from the settlement fund that Apple will pay, and the settlement is expected to range from $4.5 billion to $4.7 billion.

Some time ago, because Gaotong sued Apple for infringing its patent rights, Apple was forbidden to sell a variety of iPhone models in China. From the iPhone 6S to the iPhone X, it was within the banned model, and at the 5G's festival, Qualcomm It also stopped supplying electronic equipment China 5G chips for Apple, which led to the postponement of Apple's 5G mobile phone. Domestic mobile phones are already deploying 5G mobile phones. However, due to chip issues, Apple will not wait until 2020 to launch 5G mobile phones.

Now, the 5G chip problem has disappeared because Apple and Qualcomm have reached a settlement on the condition that Apple needs to pay Qualcomm a one-time fee, which is between $4.5 billion and $4.7 billion.

In addition to the electronic equipment China settlement fee, every time Apple sells an Apple mobile phone, it may need to pay Qualcomm about $8 in patent fees. Apple has no way. If you don't pay these high fees, 5G chips will be Qualcomm. It’s more difficult for Apple to launch a 5G phone.

Qualcomm turned its target to Huawei

According to Qualcomm's latest financial report, Huawei has paid Qualcomm a patent fee of US$150 million in the first quarter of this year, the same for the next three quarters!

This is only a temporary agreement, and how much royalties will be paid in the follow-up. Huawei and Qualcomm continue to negotiate. However, some insiders believe that the result of the negotiations will not be lower than 150 million US dollars. On the contrary, it is very likely that like the Apple mobile phone, each patent will be paid for each patent.

In order to save Lenovo's honor, Liu Chuanzhi personally went out to win the Lenovo honor defense battle. Hundreds of industry electronic equipment China players helped to make a sound, but the effect was negligible. Lenovo has gone further and further on the road of losing people's hearts.

The patent fee is not only for Huawei, but also for many domestic mobile phone manufacturers such as Xiaomi, OPPO, VIVO, etc. Qualcomm can earn a lot of money by relying on these patent fees.

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