Qualcomm antitrust investigation or closing

Antitrust investigation since Qualcomm, Qualcomm president has been into China three times for investigation.

Qualcomm is the world's leading chip provider, especially in the 3G / 4G space. Although it is generally believed that Qualcomm chip "charges too high", but domestic mobile phone manufacturers are not willing to openly interview for fear of disruption with Qualcomm cooperation, an unnamed person told the "First Financial Daily" reporter said that handset manufacturers hope Qualcomm on the "whole machine as a basis for calculating license fees" and other seven parts of the "rectification."

After the issuance of the LTE license, the domestic handset manufacturers continued to exert their efforts in the 4G market and their market share has surpassed that of Apple (97.67,0.64,0.66%), Samsung. However, in the chip area, still rely on Qualcomm. Although Huawei and other mobile phone manufacturers have already launched or are about to launch their own 4G mobile phone chips, but Qualcomm has far ahead of the technical strength and market position.

"I hope Qualcomm money not so cruel, not unrealistic." Another hand phone maker who declined to be named told reporters.

For the National Development and Reform Commission survey of the above seven parts, as well as Qualcomm future policy will make adjustments, Qualcomm told reporters that it is not yet disclosed.

Qualcomm "take-all" LTE chip market

April 3 this year, the president of Qualcomm, Derek Aberle for the first time six vice president, a Chinese lawyer to the National Development and Reform Commission for investigation. May 8, July 11, Derek Aberle has twice led his delegation to China for investigation.

Earlier, the EU, Japan, South Korea also had antitrust investigations against Qualcomm. In July 2009, Japan's Fair Trade Commission accused Qualcomm of abuse of market dominance. Abuses included forcing Japanese companies to sign cross-licensing agreements and preventing patent holders from patenting their rights. In the same period, the Korea Fair Trade Commission imposed a fine of 2,080 million U.S. dollars on Qualcomm, accusing Qualcomm of charging different licensing rates.

Domestic manufacturers allegations against Qualcomm focus on Qualcomm "as a whole machine as the basis for calculating the license fee", "the standard necessary patents and non-standard essential patent bundled", "requires the licensee to conduct a free anti-licensing," "expired patents continue Charges "," bundling patent licenses with sales chips "," refusing to license the chip manufacturing enterprises ", and" unreasonable trading conditions in patent licenses and chip sales. " The National Development and Reform Commission on July 11 also suspected of such violations on Qualcomm Vice President Fabian Gonell et al were investigated and asked.

As of June 29 in the third quarter of 2014 earnings report, Qualcomm third quarter net profit of 22.4 billion US dollars, an increase of 42%, an increase of 4%; operating income of 6.81 billion US dollars, an increase of 9%.

Steve Mollenkopf, chief executive of Qualcomm, said he was very pleased with the new record revenues, net profit and chip shipments in the third quarter, "These results are mainly due to our leading 3G / 4G chips in the industry The market for group solutions is strong. "Steve Mollenkopf also announced that Qualcomm has revised its annual profit forecast for the year to be optimistic about the company's future semiconductor performance.

Data show that Qualcomm chip and license fee income reached 243 billion US dollars in 2013, licensing business revenue accounted for 30% of total revenue, but profits accounted for up to 70%. The third quarter, Qualcomm MSM chip shipments reached 225 million, an increase of 31%, growth of 20%.

Wang Yanhui, secretary-general of China Mobile Alliance, said that Qualcomm was investigated in relation to its large share of the LTE market. "Although Marvell, Hisilicon and other LTE solutions, but the market share is too small." There have been media reports before, Qualcomm chip market share in China is close to Liu Cheng.

The above anonymous source told reporters that due to the high threshold, the current domestic only a handful of manufacturers to independently produce chips, regardless of the size of the market, the relatively high technical capacity are weak, in the market size, although Huawei, ZTE has introduced or The forthcoming independent 4G mobile phone chip, but the actual application of mobile phones only Huawei P7, glory 6 and a few other products, "Huawei, ZTE, most of the use of Qualcomm chips."

In August 2013 China Mobile 4G terminal bidding, a total of 20 models of terminal models, there are 15 Qualcomm chip, 5 using Marvell chips, 4 is Hass. According to research firm Canalys, 4G smart phone shipments in the Greater China region are expected to increase by about one-third in 2015, most of which will use Qualcomm technology.

Domestic mobile phone manufacturers more silent

Article 17 of China's Anti-monopoly Law stipulates that operators with market dominance should be banned from "selling goods at unfairly high prices or buying goods at unfairly low prices" and, for no good reason, prohibiting them from having a dominant market position The operator "refuses to deal with the counterparty", "tying up the goods or attaching other unreasonable trading conditions at the time of the transaction", and "differentiates the counterparty with the same condition from the trading conditions such as the trading price."

According to Deng Zhisong, a partner at Beijing Dacheng Law Firm, Qualcomm allegedly violated a number of prohibited provisions of Article 17 of the AML. Qualcomm uses the entire mobile phone as a basis for calculating license fees, and the legitimacy of this approach is questionable.

From a product manufacturer's point of view, once a patented technology is included in the relevant technical standard, it has to use the patented technology, and from the patentee's point of view, it becomes the sole supplier of the essential patent licensing market to the standard. Under such circumstances, the standard essential patent poses a strong position for the patentee, so there is a risk that the patentee will refuse to license or request a high license fee.

"For a non-standard essential patent, this simply means that the patent is not included in the technical standard, but does not mean that there is necessarily an alternative patent technology in the market, and the operator may directly give up the additional related to the non-standard essential patent Therefore, determining the basis for calculating reasonable licensing fees has become the key to the definition of 'unfairly high prices' in this case.

In its antitrust investigation of Qualcomm, the FTC survey found that Qualcomm provided CDMA (2G) basic technology to South Korean handset makers such as Samsung Electronics and LG Electronics while charging a 5% royalty, but if these companies use Qualcomm Qualcomm, Inc., a mobile phone component outside of other businesses, demanded payment of a royalty of 5.75% and bundled its patent licenses with sales chips.

In Deng Zhisong's opinion, Qualcomm did so in a bid to maximize its market dominance in patent licensing.

An anonymous terminal person told reporters that at present, Chinese enterprises because there are around five models of mobile phones around WCDMA and LTE-FDD technology, with a monopoly basis. At the same time, Qualcomm royalties include fixed licensing fees, floating royalties, which may involve double billing.

"Domestic enterprises in the hope of getting Qualcomm suppliers, Qualcomm's monopoly of this choice can only be silent." The above said that Qualcomm's higher permit rates, tax rates vary greatly between enterprises, the industry have "Qualcomm Tax "argument.

In the opinion of some, domestic mobile terminal chips are in the embryonic stage of industrial development. As Qualcomm and other companies monopolize 3G and 4G chip-related patents, domestic mobile terminal chips face the pressure from Qualcomm's patents because of R & D and patent fees , Will lead to high cost of domestic independent chip business, it is difficult to scale commercial.

As of July 10, 2014, more than 110 companies in China have obtained 3G CDMA licenses from QUALCOMM and more than 55 have obtained 4G LTE licenses from QUALCOMM. "Qualcomm charges to take all the strategies to break the Chinese companies to pay Qualcomm licensing fee will be a high price." The above said.

"Although Qualcomm currently visits the NDRC three times, but in these more than five months, Qualcomm did not impose a price reduction on Chinese patent license fees, nor did it have any substantive action." The above-mentioned people told reporters that they would like Qualcomm to press the NDRC The proposed requirements for rectification.