The early morning of February 1, Qualcomm announced after the close of the US stock market for the first quarter of fiscal year 2018. The report shows Qualcomm first-quarter results exceeded Wall Street analysts expectations, but for the second quarter of fiscal year 2018 earnings made Outlook failed to meet expectations.
The decline in smartphones is the main reason for Qualcomm to lower their expectations in the second quarter, with Qualcomm facing greater challenges in the coming month, including a deal for NXP and a hostile takeover defense against Broadcom.
Broadcom's takeover bid seriously undervalues QUALCOMM's value, and second, Broadcom's perception of the future of the mobile industry and the potential for mobile technology to be derived from other related industries is not the most favorable to our shareholders, and we think the takeover Will give shareholders a lot of uncertainty. "In a recent technology summit held in Beijing, Qualcomm president Christiano Amon to include, including First Financial reporters reiterated his attitude to Broadcom acquisition. At the conference, many mobile phone manufacturers, including Xiaomi, OPPO, vivo and Lenovo, openly opposed Broadcom's acquisition of Qualcomm.
At the same time, he told reporters that in fiscal 2017 Qualcomm's chip business comes from the Chinese OEM manufacturers, revenue is coming from Apple's revenue twice, the Chinese market will continue to grow.
Double revenue
In the main business of Qualcomm, QCT refers to Qualcomm CDMA Technologies Group, is mainly responsible for research and development and sales of hardware and software solutions such as chips in wireless infrastructure and equipment, and QTL Qualcomm technology licensing department, is mainly responsible for the accumulation and Acquisition of technology patents for authorization.
From the revenue share of the two business point of view, one-third of Qualcomm's revenue from patent fees, two-thirds from the chip sales, but the profit is just the opposite, two-thirds of the profits from the patent business, The remaining one-third from the chip business.In other words, after the dispute between Qualcomm and big client Apple patents still have a greater impact on Qualcomm's net profit.
Qualcomm recently announced a memorandum of understanding with Lenovo, Xiaomi, OPPO and vivo, which will purchase Qualcomm RF front-end components worth no less than $ 2 billion in three years.
Christianiano Amon told CBN reporter: 'The Chinese market is one of the fastest growing markets. One piece of data that can be shared is that in FY17, our chip business came from the products of Chinese OEMs. At the same time, I also think that the Chinese market will continue to grow, and the more opportunities we face will enable us to unite China Mobile ecosystem partners to jointly build China Mobile Ecosystem In the future, we will also be able to help China achieve the world leading position in the field of IoT, as mobile technology is also helping other technologies. "
In fact, as one of the most important mobile terminal markets in the world, the Chinese market and Chinese manufacturers have become an important impetus for Qualcomm's continued growth in the future.Currently, Qualcomm comes from China OEM manufacturers' revenue CAGR of 17% In 2015, this figure was 4 billion U.S. dollars, up from 6 billion U.S. dollars last year. Qualcomm expects to reach 8 billion U.S. dollars in 2019.
Transition period
Although Qualcomm is under pressure to stabilize the performance of the first quarter, but in the next two months, Qualcomm will face the most difficult period in history.
A month later, Qualcomm will hold a general meeting of shareholders, shareholders will be announced for the final acquisition of Broadcom antitrust regulators China's acquisition of NXP's forthcoming position may also force Qualcomm and NXP shareholders to negotiate.NPU currently Shareholders are reluctant to sell the shares to Qualcomm, arguing that Qualcomm must make a price adjustment of $ 110 a share.
At the same time, both Qualcomm and Apple's lawsuit still have no concession meanings.As of early 2017, the cooperation relationship between Qualcomm and Apple ruptured, and the two parties held many litigation contests around the patent licensing fee.The main disputes revolved around QUALCOMM's technology licensing business. Qualcomm intellectual property licensing model is unreasonable, while Qualcomm accused Apple of using Qualcomm patents without paying.Qualifier and Apple have been in the United States, China and other places have initiated many lawsuits.
However, Qualcomm is also looking for more favorable conditions for the future performance support, the Chinese manufacturer's support is one of them.
On January 25 Qualcomm Technology Summit, OPPOCEO Chen Mingyong, vivoCEO Shen Wei, Xiaomi President Lin Bin, ZTE terminal CEO Cheng Lixin, Lenovo Group Executive Vice President AymardeLencquesaing made it clear that against Broadcom's Qualcomm acquisition.
According to the survey data of HISMarkit, OPPO and Xiaomi are the top five vendors in the global smartphone sales volume in Q3 of 2017. vivo, ZTE and Lenovo are among the top 10 vendors in the world in terms of shipments, which means that the above five mobile phone manufacturers' Stand for the global mobile phone industry represents the mainstream voice.
Earlier, OPPO, vivo executives of both companies have said publicly that the potential merger against Broadcom and Qualcomm because of concerns that the deal will squeeze profit margins for smartphone makers sacrifice the interests of manufacturers, so that large-scale global competition Opponents benefit from it.
Broadcom announced in November 2017 that it plans to acquire Qualcomm at a price of more than $ 100 billion per share for $ 70 a share, which Qualcomm Board and management boycotted.Bottom did not give up, but the position will continue to promote the acquisition Qualcomm also sent a letter to its shareholders on January 23, 2018, stating that Broadcom's acquisitions have regulatory issues and will not bring long-term value to the company, calling on shareholders to boycott Broadcom.
At Qualcomm's annual general meeting on March 6, 2018, Broadcom's acquisition of Qualcomm will usher in a Qualcomm shareholder vote.