However, Broadcom did not give much detail on how Qualcomm was to be tuned in. Qualcomm has just rejected a takeover offer from Broadcom, claiming Broadcom's bid underestimated Qualcomm's value and would be hampered by regulators.
Qualcomm's patent-pending business in FY17 pretax profit was about $ 5.1 billion while its chip business before-tax profit was $ 2.7 billion. Broadcom CEO Hock Tan will have to carefully consider any change in cost cutting, and analysts That Qualcomm's primary goal each year is to arrange $ 5.5 billion in research and development expenses.
Broadcom, after a successful acquisition of Qualcomm, will work hard to maintain its authorized business economics by adjusting the price structure between licensing and chip sales, according to one source, adding that Broadcom will also attempt to renegotiate with key customers Business contract.
Broadcom is eager to appease big clients like Apple and getting support from these big clients is a must for overcoming regulatory barriers While Broadcom has expressed its suspicion of possible conflicts with customers despite skepticism from customers about their integration with suppliers Program, a conflict that has led the government regulators to crack down on and trigger the prosecution of Apple, and is also pushing other customers to stop paying licensing fees.
At the heart of this conflict is Qualcomm's call for handset makers to pay license fees for their intellectual property after paying for the chips, and Qualcomm has developed many of the foundational technologies in mobile communications.
Apple alleges that Apple has claimed that Qualcomm's approach is 'double charging.' Qualcomm has repeatedly denied its patents anti-competitive, that its chip business and patent business are operating separately.
Earlier this month, a Broadcom spokeswoman told the media that Broadcom believes that global regulatory authorities will welcome the deal as part of a solution to the two-tiered charge. Broadcom chief executive Tan Hooke earlier this month In an interview with the media, he said he believes Broadcom 'will be very constructive in resolving these issues and re-establishing relationships. If we do not believe that our common key clients will accept the offer, we will not propose the acquisition In this regard, Broadcom is not willing to make further comments.
Some analysts said Broadcom in addressing Qualcomm's licensing problems there are three possible ways: to sell or spin-off authorized departments, to switch to the fixed fee model, only charge the chip fee but the price increase.
The simplest option for Broadcom is to sell Qualcomm's licensees to strong buyers or Qualcomm shareholders, but its valuation will be hard to pin down. Qualcomm revenues in this segment were $ 7.9 billion in 2015, Has dropped to 6.4 billion US dollars, mainly due to Apple and another customer suspended the payment to Qualcomm.
Karl Ackerman, an analyst at Cowen and Co, an investment bank, said in a research note that if the authority still remains in Qualcomm, one possibility is that Qualcomm will abandon its charge based on the percentage of the sale price of the handset rather than on the handset Number of charges practice.
According to Bernstein analyst Stacy Rasgon, the most likely course of action for Broadcom is to end the practice of asking chip customers to pay licensing fees, but to target a small amount of chip prices for these customers Higher, while Broadcom will leverage Qualcomm's patent portfolio leverage to lock long-term supply agreements.
But the move could lead to lower overall prices for customers such as Apple, which Stacy Laszloon expected to pay around $ 15 for Qualcomm chips and an additional $ 10 per device for a license fee of about $ 25. Broadcom may charge only $ 18 to $ 20 per chip.
'This is completely different from Qualcomm's business model,' says Stacy-Larson, '' (Broadcom's CEO) is actually saying, 'You're wrong - that licensing revenue will not come back anymore ''
Apple declined to comment on the news, but the company has indicated it is willing to settle the patent dispute at the right price, with Apple pre-paid more than $ 2 billion in cash advances to Nokia Settlement earlier this year and agreed to do so on an annual basis Disclosure of digital payments.
Stacy - Laszlo estimates that regardless of the new approach, Qualcomm will receive about 2.5 billion U.S. dollars in patents each year from Apple.