Huawei's dominance will expand at the end of Qualcomm's antitrust case

Tencent Technology Guoxiaofeng December 5 reported a year, Qualcomm antitrust case will be settled. According to Tencent technology from reliable sources learned that at the latest meeting of the NDRC's internal communication, the government has formed a preliminary opinion on the punishment of the high-pass anti-monopoly case, which will involve the fines, the adjustment of patent fees and the cancellation of the patent's anti-authorization, which has now been reported to the relevant departments of the State Council for approval. The results are expected to be released by the end of this month. According to the people close to the meeting told Tencent Technology: the amount of fines eventually to be approved by the higher units, but compared to the fine, the high-pass patent fee mode of adjustment and the cancellation of patent authorization more important. Tencent Science and technology in-depth understanding, after many rounds of exchanges and negotiations, the communication will be decided to the high-pass patent charging mode to the chip module billing, cancellation of machine billing, and the abolition of Qualcomm's patent antitrust, and the above adjustment is limited to the Chinese market, the final approval to wait for the State Council. In this connection, Qualcomm China's official said Tencent technology, Qualcomm is still actively communicating with the government, there is no other information to disclose. and high-pass tax say goodbye Qualcomm is the only company in the world to provide a complete 2g/3g/4g mobile phone chip solutions, with a number of core patents, the main profit from the patent licensing fees, which is Qualcomm's most core business model. The vast majority of Android smartphones currently on the market are using their chips. Last December, the NDRC conducted an antitrust investigation and a clear survey of Qualcomm in July this year included seven items, including a machine as the basis for calculating licensing fees. According to Tencent Science and technology, since the case, the Development and Reform Commission and Qualcomm's open talks a total of 5 times, coupled with the open internal communication will have been more than 10 times, both sides of the core issue of the business debate is Qualcomm patent fee charging mode adjustment. Prior to that, Tencent Technology has exclusive exposure to the above mentioned fines, patent fee adjustment and the abolition of patent anti-authorization penalty content, but at that time did not determine the specific details. The internal communication will finally have a substantial progress, that is, Qualcomm's patent charging mode adjusted to the chip module billing, cancellation of the whole machine billing, at the same time determined the abolition of patent authorization. Specifically, domestic mobile phone manufacturers per shipment of a mobile phone, in addition to the payment of Qualcomm chip costs, but also in accordance with the machine price of additional payment of about 5% to 6% of the patent licensing costs to Qualcomm, this type of patent licensing fees in the industry is known as high-pass tax, the actual percentage will be based on different For example, the same two uses Qualcomm the same chip of the mobile phone, one of them because of the use of a larger screen or improve the camera pixel hardware configuration, the overall price will increase, when the licensing fee for Qualcomm will increase correspondingly, but this is in fact and is a high-pass chip royalty charges within the range, But Qualcomm and the handset manufacturer signed the chip authorization with the complete machine's patent licensing agreement. In layman's terms, a mobile phone using a Qualcomm chip, assuming the price is 2000 yuan, the handset manufacturers first to give Qualcomm chip patent fees, to its single chip average price calculation, usually about 23 U.S.Yuan (about 140 yuan), and then hand over 5% of the whole machine, that is, 100 yuan, the cumulative pay 240 yuan. Still in accordance with the 2000 Yuan machine price calculation, according to the chip module billing, cancellation machine billing, mobile phone manufacturers in addition to pay Qualcomm chip fees, the other part of the patent licensing fee billing base from the whole machine into a chip module, that is, 23 U.S. dollars 5% can be, so the cumulative pay costs compared to reduce the cost of nearly 60%. So why are handset makers willing to pay high taxes before? According to Tencent Technology, a person with a mobile phone manufacturer said as part of Qualcomm's typical licensing agreement, the patent rates paid by authorized manufacturers to Qualcomm for the products they sell remain unchanged for the duration of the agreement, and many companies have signed long-term cooperation agreements with Qualcomm, even if the authorized Qualcomm patents have increased, To continue to enjoy the patents in the ever-increasing patent portfolio of Qualcomm. In addition, Qualcomm Patent anti-licensing protection is favored by manufacturers. As we all know, mobile phone manufacturers want to use Qualcomm chip, the prerequisite is to sign a patent licensing agreement with Qualcomm, the mobile phone companies to authorize the relevant patents to Qualcomm, and not to use these patents to prosecute Qualcomm's other customers. If the penalty content is passed, Qualcomm over the years the chip + patent combination of play will be completely overturned, from a global perspective such a punishment is unprecedented. Tencent technology inquires the relevant data found that from 2006 onwards, Japan, South Korea and the European Union in succession to the high-pass antitrust investigation, but in these several surveys, Qualcomm has been very tough. South Korea issued a 208 million-dollar ticket to Qualcomm in 2009, but Qualcomm appealed and announced the establishment of a research and development center in South Korea. The European Union was also in the process of reviewing the complaint that it had reached a settlement with the high Qualcomm and had voluntarily withdrawn the investigation. Far-reaching implications for Qualcomm, the effect of fines will not be bones, and the pattern of patent collection is a direct hit to the nail, especially for Qualcomm's consistently dazzling performance will have a huge impact. Data show that 2013 fiscal year, Qualcomm's global total revenue reached 24.9 billion U.S. dollars, chip shipments reached 716 million, China's market revenue of about 12.3 billion U.S. dollars, accounting for more than about 49%;gartner report data show that 2013 China market smartphone sales of about 320 million units, based on Qualcomm Chip smartphones over 70%, reaching more than 210 million. If the 210 million, the average price of 2000 yuan smartphone to estimate, affected by the adjustment, Qualcomm a year in China to lose at least nearly 20 billion yuan, accounting for nearly one-third of domestic income. And in the domestic 4G rapid popularization, Qualcomm market share continues to rise, the future loss is much higher than this. Qualcomm's latest earnings in the fourth quarter of 2014 showed a 6.69 billion-dollar high, down 2% from the previous quarter, with operating profits down 4% from the previous quarter, net profit down 15% and earnings per share falling 15%. Qualcomm's performance tumbled in the fourth quarter, mainly because of the anti-ridgeApart from mainland China, the Federal Trade Commission and the European Commission are investigating Qualcomm's licensing and chip business. Steve Mollenkopf, Qualcomm's CEO, said: "The results of fiscal year 2015 will be affected by the Mollenkov of our mandated business in China." China is still full of business opportunities for us, especially after the release of 3G/4G LTE Multimode products, but it also presents us with great challenges. Secondly, assuming that the NDRC has passed the anti-monopoly sanction on Qualcomm, the impact on industry will be far-reaching. Industry consensus, high-pass tax is far higher than the profit level of China's terminal enterprises, the cost of enterprises caused great pressure. According to statistics, 2013 domestic mobile phone business net profit is less than 5%. And once adjusted to the chip module billing, canceling the whole machine billing, means that Qualcomm can only charge chip patent fees, which will undoubtedly pull the end of the total profits of manufacturers. In addition, the cancellation of the patent's anti-authorization, the patent reserve has the advantage of ZTE, Huawei and other mobile phone manufacturers will bring more revenue, the lack of patented mobile phone manufacturers have a fairer market environment, but also face the patent pressure of competitors, such as the recent industry mad ZTE to Millet, Opp sent a letter of Attorney event. In the future, if the chip module billing, Qualcomm is bound to make chip price adjustment. Some analysts believe that this for such as the exhibition, MediaTek, Huawei Heiss such a domestic chip dealer is a positive opportunity. The reason is the cancellation of Qualcomm's patent anti-authorization, this means that without a core patent, a mobile phone maker will have a more diversified choice of chip makers in the future, and that, in order to make up for lost profits, Qualcomm will not be able to raise chip prices in the short term, but after a period of adjustment, At this time, the advantages of domestic chip manufacturers comprehensive cost-effective nature revealed.