Times reporter Wang Yuan from Guangzhou
Qualcomm can be described as fleeting disadvantage this year, in addition to pinch with Apple pinch, the recent encounter barbarians knock on the door, and the latest report handed over to conceal the decline, Qualcomm's crisis has intensified the trend.
As the global chip giant Qualcomm, due to hand over a large number of others around the basis of communication patents, the global handset makers to collect money has become a "long-standing business." But the face of the giants of the joint 'resistance' Qualcomm and the entire industry will have what kind of impact? Qualcomm in recent years, the development of what kind of problem, a generation of chip giant is how to decline, breaking the road and where?
Broadcom acquisition of smoke again
After the U.S. semiconductor giant Broadcom proposed the 130 billion U.S. dollar tender offer was rejected by Qualcomm, Broadcom recently made an offer to Qualcomm again, with tough measures to submit the nomination of 11 new directors to seek a new Qualcomm board of directors.
Previously, as early as November 6, the US semiconductor company Broadcom proposed at a price of 60 US dollars per share and $ 10 Broadcom shares of all outstanding Qualcomm shares acquired, known as the history of the largest TMT mergers and acquisitions in the field, has been the world's close Concerned. Subsequently, Qualcomm decisively rejected the acquisition.
On December 7, when Qualcomm CEO Steve Morrenkov attended the economic club in Washington for the first time in a public response to the takeover, he said: "Qualcomm thought the offer was simply unacceptable and far worse." Molenkov Said Broadcom and Qualcomm last year for talks on the possible merger between the two sides talks, but no progress at the same time it also expressed confidence in the company's ability to independently operate and resolve legal disputes.
Regarding Broadcom's acquisition, a statement from Qualcomm to Die Zeit reporter revealed that Qualcomm's Board of Directors, after a thorough evaluation and consultation with its financial and legal advisors, found Broadcom's proposal seriously undervaluing Qualcomm and there was a huge regulatory uncertainty , So does not meet the best interests of Qualcomm shareholders.
Qualcomm noted that Broadcom and Silver Lake are in fact demanding that shareholders abandon these future-proof options, including cutting-edge technologies such as smartphones, the Internet of Things, 5G and others. Now it is time for this non-binding deal proposal However, in fact, there are many uncertainties in the coming year, including the many regulatory issues involved. Currently, Broadcom does not make any commitment to solve the above issue. In addition, Broadcom still lacks confirmation of the funding guarantee from Singapore Plans to move to the United States will also bring more uncertainty.
It is understood that the Qualcomm board of directors consists of 11 global top-level directors, of which nine are independent directors, four in the past three years to become a board member, and all directors are firmly committed to representing the best interests of all Qualcomm shareholders.Golden that Broadcom One move is the blatant attempt to seize control of Qualcomm's board of directors in order to promote its acquisition schedule.Quotes Qualcomm severely pointed out that the list of candidates proposed by Broadcom there is a conflict of interest as it intended to acquire Qualcomm by way of greatly undervaluing Qualcomm, For their own benefit.
Analysis of the industry pointed out that many giants, including Microsoft and Google, also expressed concern about the merger.because the Qualcomm and Broadcom transactions may help to improve its relationship with Apple, and the new company to pay the Apple and Not conducive to the development of competitors at the same time the outside world also Broadcom 'tend to reduce costs rather than investing in new technologies' reputation was worried.
'Qualcomm tax' provoke public anger?
When Broadcom launched Qualcomm's biggest merger in the history of the semiconductor field, the patent dispute between Apple and Qualcomm escalated further, further deteriorating the relationship.
November 29, Apple Inc. counterclaim against Qualcomm, said the latter developed the Snapdragon smart phone chips at least violated its eight mobile phone battery life-related technology patents.Golton is re-appealing Apple infringes five patents, involving iPhone 8 and iPhone X.
Apple Qualcomm's full refute the fire from the beginning of this year, the first lawsuit is Apple, Qualcomm monopolized the wireless chip market, one after another in the United States, Britain, China filed a lawsuit, filed a claim.Then Qualcomm counterclaims, that Apple first violated the agreement , Deliberately not giving full play to the performance of its chips in the iPhone 7 and brought it to court along with several foundries, including Hon Hai Precision, Wistron, Compal, and Hesuo Union.
By the end of September, Qualcomm further increased its code and initiated a lawsuit in China at the time of the announcement of the new Apple product, hoping to ban the sale of Apple in the Chinese market.Export shows that as of the end of September 2016 fiscal year, Apple's revenue from Greater China Contribution was 22.49%, to the end of April this year, this ratio was 20.54%, and in July of this year, this ratio continued to decline to 17.63%. 'Snake hit seven inches', the severity of Qualcomm sniper Apple is self-evident .
In Apple's opinion, Qualcomm's charging model is unbearable, called "patent rogue." That is specialized in hoarding intellectual property, but not to create any real product, exclusively to collect litigation costs live, Apple believes that this is not fair to mobile phone manufacturers. Qualcomm is that Apple would like to force Qualcomm to accept unfair patent license fees to achieve the purpose of increasing sales of iPhone sales.
It is worth mentioning that, in addition to Apple fury, worldwide, recently there have been many manufacturers broke the news of the suspension of patent royalties paid to Qualcomm, including the two giants Huawei and Samsung, the 'Anti-Qualcomm' coalition camp seems to be increasingly grow.
For patent issues, Huawei and Qualcomm all told reporters that they did not comment.
The world now domino crisis
Insiders pointed out that Qualcomm chip monopoly of the high-end mobile phone market, cell phone manufacturers are also trying to reverse this passive situation.At present, the world's top three mobile phone manufacturers Samsung, Huawei, Apple has self-developed chips, and put into use. Media reports, Apple or will be in 2018 new iPhone, iPad abandoned Qualcomm, Apple consider using Intel's baseband products instead, MediaTek is also possible.
IDC data show that at present, Samsung and Huawei are the number one and number three in the world of smartphones. Taking the third quarter of this year as an example, they respectively took up 22.3% and 10.5% of the market share. Apple ranked second, 12.5% of the market share.If Huawei and Samsung followed the footsteps of Apple, join the patent fee dispute team, asked Qualcomm to return to the negotiating table, for the Qualcomm is undoubtedly a heavy blow.
In the opinion of senior telecommunications analyst Chen Zhigang, the reason why the "Qualcomm tax" business model has caused more and more opposition voices has mainly for two reasons. One is that as Apple put it, a mobile phone only uses part of Qualcomm Devices and patents have to pay royalties to Qualcomm in accordance with the sales price of the whole machine, which is unreasonable; Second, Qualcomm's reverse authorization to make any patent other than Qualcomm a waste paper, anyone using Qualcomm products You need to grant free and free license to Qualcomm and other people using Qualcomm's patents, that is, you only need to use Qualcomm products, you do not need to find anyone who also uses the Qualcomm patents for the patent .This point, many people in the industry from the fair From the perspective of innovation and incentives are also more criticized.
However, Apple and Qualcomm licensing disputes, and Huawei and other vendors and Qualcomm licensing disputes, there are also many differences.
As early as June last year, Qualcomm had sued Meizu in China, saying it infringed Qualcomm's 3G and 4G patents, refused to pay 500 million royalties after half a year of tug of war, the two reached a patent license agreement to resolve the two in the Patent disputes worldwide.
Chen Zhigang pointed out that Apple's appeal is very obvious. Without permission, Qualcomm's patent licensing model is to be changed. However, the so-called protest by Huawei, Samsung, etc. is not intended to seek to change the basic structure of Qualcomm tax but only to obtain more negotiation with Qualcomm Only chips.
In fact, in recent years, 'Big Brother' Qualcomm has encountered many antitrust investigations on a global scale. In February 2015, the National Development and Reform Commission (NDRC) imposed a fine of 6.088 billion yuan on Qualcomm due to monopoly and imposed a new proportion of royalties In December 2016, South Korea imposed a punitive 1.03 trillion won on Qualcomm in violation of the Fair Trade Act, and by October this year Taiwan's Fair Trade Commission (FTC) unfairly obstructed its competition with NT $ 23.4 billion 50.9 billion yuan) punishment.
To a certain extent, Qualcomm established the legitimacy of its business model after paying fines to government agencies.
Li Junhui, a researcher at the Center for Intellectual Property Studies at China University of Political Science and Law, told reporters that the patent dispute between Apple and Qualcomm should eventually be reconciled. "Apple is only going to delay the war and wants to crush Qualcomm unrealistic."
Li Junhui told reporters that in fact, both Apple, or Samsung, Huawei, for their smart phones sold in the Chinese market, this part of the patent license fee standard is clear or uncontroversial because Qualcomm has been in accordance with the rectification and reform Commission rectification Requirements, reducing the proportion of licensing fees, and re-and hundreds of vendors, including Huawei, reached a patent licensing cooperation 'Therefore, if Samsung or Huawei is really follow the example of Apple, to suspend the payment of patent licensing fees to Apple, On the one hand, it depends on whether the patent licenses that are still valid for both sides are regional or global; on the other hand, it should be noted that the disputed area or market should not be in China.
In particular, Qualcomm may file a lawsuit against manufacturers that suspend licensing fees for smartphones manufactured and sold by three companies in China, according to the rectification plan submitted to the NDRC, "said Li Junhui.
On the other hand, Qualcomm is also facing a crisis from the capital level due to fiercer competition with Apple, Qualcomm shares stumble since the beginning of 2017, rebounded only until November.Competitive chip maker Broadcom see 'looting' , The latter intends to 130 billion US dollars to Qualcomm initiated the acquisition, but was Qualcomm board of directors to bid too low on the grounds that the industry is expected to Broadcom will turn hostile takeovers in the coming weeks, and is ready to launch a proxy war with Qualcomm.
Profit 'Cliff' glides
All along, even in the world more than fined, more than lawsuit, but stubborn Qualcomm, would rather be a lawsuit, would rather pay a fine, but also to keep their own patents and reverse authorization mode remains the key is that it is Qualcomm Relying on the core business model of survival. Patent licensing business can be said that Qualcomm 's printing machine.
According to the weekly report of Qualcomm, Time Weekly reporter learned that in FY17, Qualcomm's license fee for technology was 6.445 billion U.S. dollars and its revenue contribution was 28.91%. In FY16, the license fee for technology was 7.66 billion U.S. dollars and revenue contribution was 32.5% License fees as much as 7.947 billion US dollars, revenue contribution of 31.43%.
According to data released by Strategy Analytics, market research firm Global Smartphone operating profit was 53.772 billion U.S. dollars in 2016, of which Apple's profit was 49.997 billion U.S. dollars and Samsung's profit was 83.12 billion U.S. dollars while China Mobile made a profit of 929 million U.S. dollars and its OPPO profit 851 million US dollars, vivo profit of 732 million US dollars.Apple carved up more than Jiucheng profits while the overall profitability of domestic mobile phone patent royalties paid to Qualcomm even surprised, it is amazing.
However, Qualcomm rely on the patent lying down can also make money in the golden years, is not rest assured that the reporter access Qualcomm reported that the financial year 2013 to 2017 fiscal year 5 years, Qualcomm total revenue were 24.866 billion US dollars, 26.487 billion US dollars, 252.81 Billion, $ 23,554 million and $ 22,291 million, after a peak year in 2014, followed by a year-on-year downward trend with a net profit of $ 6,845 million, $ 7,964 million, $ 5,268 million, $ 5,702 million, and $ 24.65 respectively in the five years Billion .As of the end of September this year, fiscal year 2017, net profit was only 43.23% the previous year, hurriedly cut.And Qualcomm fourth quarter 2017 net profit of 168 million US dollars, a year earlier to 15.99 billion US dollars , Down 90%.
Qualcomm reported four quarterly reports, and Apple mischievously, Apple refused to pay high royalties to the high royalties led to plunge in profits.
Chen Zhigang told reporters that overall, Qualcomm's decline in performance, mainly due to the high pass tax crisis in the world these two years, the government penalties, Apple and other giants patent war, affecting Qualcomm tax revenue growth, while responding to competitive market sales Increased costs and R & D investment also reduced profit margins.
Li Junhui told reporters that the key to reverse the Qualcomm is to rely on the remedies provided by law to resolve as soon as possible licensing disputes with Apple.
Previously, Donald Rosenberg, executive vice president and general counsel at Qualcomm, said Qualcomm's executive vice president and general counsel said these litigations, including those in Germany, are likely to reach a final result sometime by mid-2018. Litigation in China will also be faster To get the result, the International Trade Commission will quickly move forward.
At the same time as sawing with Apple, Qualcomm did not give up trying to grasp another main line that reversed its fate.
A few days ago in Hawaii held the second Qualcomm Snapdragon technology summit, Qualcomm openly stressed that for Qualcomm executives team, one task is the top priority, that is, to promote 5G technology.
According to a report released by research firm IHS Markit, the future 5G will be an indispensable foundation for changing social communication technologies, and it is estimated that by 2035, the global 5G value chain itself will be able to create up to 3.5 trillion U.S. dollars of output.
In fact, since its inception, Qualcomm has invested heavily in technology research and development, with annual R & D investment accounting for more than 20% of its revenue and accumulating more than 46 billion U.S. dollars so far. Although this process takes a lot of trial and error, Many of the technologies and products successfully applied.For the 5G R & D, Qualcomm in 2006 began a forward-looking research and development, and actively make an important contribution to 3GPP standardization to promote the development of a unified global 5G standards.
In October of this year Qualcomm tested the world's first working 5G data connection on mobile devices and also demonstrated the first 5G smartphone reference design.What's worth mentioning is that Qualcomm recently disclosed the 5G patent Authorized license, and announced the future 5G patent fee collection standards.Mobile phone manufacturers the fastest or next year can launch a real 5G mobile phone.As the next generation of communication technology, Qualcomm speed re-bet betting on the 5G.
In a statement sent to reporters by Qualcomm sources, Qualcomm said: "QUALCOMM undoubtedly has a better position in smartphones, IoT, automotive, edge computing and networking technologies than any other company in the industry and is Leading the industry in the 5G era Qualcomm shareholders are about to witness and share significant growth and value creation as the company continues to steadily pursue its strategy in these areas.
Although 5G giants everywhere, including Intel, Huawei giants are eyeing and accelerate the layout, but Qualcomm 5G chip has made some of the first-mover advantage.Industry insiders told reporters that if Qualcomm continue to occupy a larger share of the market , Which will ultimately significantly improve the company's performance.