Figure: Visual China
Every time by reporter Wang Jing Lu Xiang Yong editor
QUALCOMM, one of the world's largest maker of semiconductor chips, released its fiscal fourth fiscal fourth quarter results on Nov. 2. Results showed that for the quarter ended Sept. 24, the company posted a net profit of 200 million U.S. dollars , Down 89% from $ 1.6 billion in the same period of 2009. Not only that, Qualcomm has seen a decline in revenue and net profit from 2016 over the entire FY17.
In this regard, many people in the industry interpreted as 'Qualcomm has been pressured by Apple' .In January of this year, Apple accused Qualcomm of its chip overcharged, refused to refund the original commitment to refund the $ 1 billion patent fee.At the end of April, Qualcomm said Apple will not pay royalties to Qualcomm for the handsets it sells in the first quarter of this year and Apple will not pay any subsequent payments until the legal dispute is resolved.
To make matters worse, with the intensification of patent war on both sides, the media such as the Wall Street Journal and Reuters recently reported that Apple is considering to completely abandon the Qualcomm baseband chip in the iPhone and iPad tablets released in 2018 and instead use Intel or MediaTek chips.
Fourth quarter net profit fell 89%
Qualcomm posted its fourth fiscal quarterly results for FY 2017 on Nov. 2. The company posted a net profit of 200 million U.S. dollars in the quarter, down 89% from 1.6 billion U.S. dollars in the same period last year, and a revenue of 5.9 billion U.S. dollars, Down 5% from $ 6.2 billion in the same period last year and up 10% from $ 5.4 billion in the previous quarter. Throughout FY 2017, Qualcomm reported revenues of $ 22.3 billion, down from $ 23.6 billion in FY 20165 %; Net profit was 2.5 billion U.S. dollars, a 57% decline from the 5.7 billion U.S. dollars in FY16.
As for the reasons for the decline in profits, Qualcomm explained in the earnings report, Apple and its foundry manufacturers from the beginning of 2017 will only pay a small amount of royalties, or do not pay, which affect the performance of the last three quarters.
Qualcomm has two core business units, one for chipsets and wireless modems for smartphones and other computing devices, the other for smart phone manufacturers, and most of Qualcomm's profits from patents. Yes, the two business units are currently facing severe challenges - large customers such as Samsung, Huawei and other independent chips have been developed in recent years, and authorized businesses are also facing antitrust investigations in many countries and regions.
At the end of 2016, South Korea's antitrust regulator imposed a fine of 855 million U.S. dollars on Qualcomm and a fine of 975 million U.S. dollars to China's National Development and Reform Commission in 2015. Up till now, Qualcomm is still facing major customers such as Apple Inc. and the U.S. Federal Trade Commission Prosecute.
In fact, for the fourth quarter of Qualcomm net profit fell sharply, many people in the industry interpreted as 'Qualcomm has been under pressure from Apple'.
Back in January of this year, the tug-of-war between Qualcomm and Apple over patent royalties was launched when Apple accused Qualcomm of charging too much for its chips and refused to refund the one billion-dollar patent it had promised to return to. Shortly thereafter, The U.S. Federal Trade Commission also filed a lawsuit against Qualcomm, accusing the company of abusing its market dominance as a supplier of specific handset chips, imposing 'harsh' terms of supply and patent licensing on handset makers such as Apple.
'Love and kill' the word aptly described the conflict between Qualcomm and Apple after Apple's products have benefited from the annual hot, Qualcomm earned pours.According to Macquarie Capital is expected in 2016, Apple produced Qualcomm Baseband chip revenue 3.2 billion US dollars, accounting for 20% of the latter total chip sales; last year, Apple paid 2.8 billion US dollars to Qualcomm royalties, accounting for the latter 30% of pre-tax earnings per share.
But now, Apple has not paid royalties to Qualcomm for handsets sold in the first quarter of 2017, and subsequent payments will not be paid, while Qualcomm seeks to impose an import ban on the iPhone, and Qualcomm and Apple are in the midst of patents The contradiction has also spread to Apple's suppliers May 17 this year, Qualcomm filed a lawsuit in the Federal District Court in Southern District of California, accusing four of Apple's manufacturers, namely Foxconn, Hesuo Union, Wistron and Compal violations Waived their license agreement and other commitments with Qualcomm and declined to pay for the use of Qualcomm's licensed technology, noting that in the third quarter of 2016 Apple Foundry had paid $ 700 million in royalties to Qualcomm.
Chip Apple will be abandoned next year?
Recently, the "Wall Street Journal" reported that Apple is considering to completely abandon Qualcomm baseband chip in the iPhone and iPad tablet released in 2018, instead using Intel or MediaTek chips.Individuals, Reuters also quoted people as saying , The new iPhone released next fall may abandon Qualcomm chips.
Qualcomm chips will be out of the news of the impact of Qualcomm shares fell as deep as 8% on Tuesday intraday, and finally closed down 6.68% to 51.01 US dollars, close to less than 50 US dollars on September 8 mark the low since February 2016, the past 12 Month plummeted 26%.
For 'Qualcomm is going out, MediaTek will squeeze into the Apple product supply chain', "Daily Economic News" reporter contacted MediaTek to verify and understand the situation, the company responded: 'MediaTek co-CEO Cai Lixing nothing However, the relevant person in charge of Qualcomm told reporters that they also read the news about foreign media before they knew it, and the sources of foreign media coverage were rather vague. The government did not respond at this moment.
It is noteworthy that, as early as last year, Apple has already used some of Intel's baseband chips on the iPhone 7 and 7 Plus products, this year is no exception.In September, Apple introduced the new iPhone 8 and 8 Plus, in addition to Qualcomm chips, Apple Continue to use the Intel chip.In addition, according to Strategy Analytics data show that the global baseband chip market share of 5 billion US dollars, of which Qualcomm has an absolute leading position of 50%, MediaTek and Intel have 25% and 6% market share, respectively Apple really abandoned Qualcomm, will undoubtedly raise the competitive position of the two companies after the industry.
However, in the view of Wang Yanhui, secretary-general of China Mobile Alliance, Apple will have a lower chance of abandoning Qualcomm chips in the next year.¹ From a technical point of view, it is still a big risk that Apple will abandon Qualcomm chips and Intel, MediaTek baseband The chip is still lagging Qualcomm in terms of download speed, etc. But now is the forefront of 5G R & D stage, Qualcomm is leading in the 5G wireless technology, and smartphones with 5G chips are expected to be large-scale market in 2019, Apple also needs Qualcomm in the future In fact, for such large companies as Apple and Qualcomm, the two sides are bound to move toward reconciliation in the future, but it still needs a process.