Word comes out of China this evening that an ongoing anti-trust investigation into Qualcomm has come to an end. Ruling against Qualcomm, China’s National Development and Reform Commission has found Qualcomm guilty of violating Chinese anti-trust laws, and has fined the company $975 million alongside imposing new licensing rules on the company.

At the crux of the matter has been Qualcomm’s patent licensing program in China, portions of which the NDRC has asserted violate Chinese law. As Qualcomm owns a number of standards-essential 3G and 4G patents, Chinese firms must in turn license these patents for their phones and cellular-enabled tablets. To that end, Qualcomm’s bundling of various patents has been under extreme scrutiny, particularly the bundling of other patents with the standards-essential 3G and 4G patents, a process that would force Chinese manufacturers into paying more to license additional patents they did not need.

As a result of the NDRC’s ruling, Qualcomm is being fined 6.088 billion yuan ($975 Million) and is having new royalty rules imposed. Resolving the immediate problems that lead to the ruling, Qualcomm will now be required to offer the standards-essential 3G and 4G patents separately, putting an end to the bundling practice. Meanwhile new royalty rates and procedures are also being set; Qualcomm’s rates in China will be similar to the rest of the world, and the rates will be calculated against 65% of the total value of the device.

Overall the $975 million fine is the largest in Chinese history, and while it will put a dent into the company’s pockets in the short-run, it is still less than half of the company’s $1.97B net income for their most recent quarter. More significant is the ongoing revenue impact from the reduced licensing revenue, which has already caused the company to reduce their 2015 earnings forecasts by $0.58 per share. More than half of Qualcomm’s net income comes from royalties from patent licensing, so anything that impacts their patent licensing business has a significant impact on their bottom line.

Finally, Qualcomm will not be appealing this fine, having entered into it as part of an agreement with the NDRC to end the anti-trust investigation.

Source: Bloomberg

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  • ddriver - Tuesday, February 10, 2015 - link

    But then again, if they don't sell a useless GPU with each and every i7, intel will lose GPU market share, even if tiny, since they don't sell nearly as much i7 as they do cheaper chips.

    I don't really see any practical side to why i7 would need iGPU in the first place, there is no need to spend extra money on developing two i7 varieties, the iGPU-less i7 is all that is really needed.

    But I guess intel's had a hard time boosting performance marginally the last few years, so the way they "prefer" to make up for it is to push useless features to their costumers rather than a few extra cores. They prefer to waste the silicon than put it to good use. I am sure AMD's struggling (understatement) to compete has a lot to do with that kind of behavior.
  • Sushisamurai - Tuesday, February 10, 2015 - link

    I'm not saying they use stencils (simplified) - I'm simply stating that creating an i7 without iGPU would mean at the very least another manufacturing line, or diversification of a pre-existing one: which adds cost to either the new i7 or the ones with an iGPU. Granted, I would prefer the current cost of CPU's as opposed to an inflated one due to an additional line of i7's without an iGPU.

    Adding two more cores would compete with their own product line and possibly cannabalize sales of higher ASP (avg selling price) chips. You have some valid points, but I'm also playing devils advocate
  • ZeDestructor - Thursday, February 12, 2015 - link

    Btw, servers don't care about iGPU - any same server has an IPMI of some form, which comes with a shitty GPU of it's own for KVM usage, usually some version of the venerable Matrox e200W (or something of the sort).
  • RobertJB001 - Friday, February 13, 2015 - link

    But servers don't get integrated Graphics
    E5-2623V3 @ 3Ghz Haswell 22nm
    (Ballpark equivalent here)
    i7-5557U @ 3.4Ghz Broadwell 14nm (2core/4thread)

    So the i7 gets 2 cores & lower power but the E5 discards the GPU in favour of (yep more cores) 2 physical ones so it's 4core multi thread.

    Then Intel put a premium on it BECAUSE you get more cores...
  • ZeDestructor - Thursday, February 12, 2015 - link

    This is, they already do so on some Xeons. Granted, it s the same die, withe the iGPU disabled, but it does exist.
  • MrTeal - Tuesday, February 10, 2015 - link

    There are a massive number of business users (myself included) that can benefit from the additional resources of an i7 without needing anything other than integrated graphics. Not everyone who buys an i7 is a gamer.
  • Oxford Guy - Sunday, February 15, 2015 - link

    Why not just have a crap GPU on the motherboard as they already do with sound chips and ethernet?
  • Azurael - Monday, February 23, 2015 - link

    You mean like every IGP solution before Intel and AMD started sticking them on-die? But if they don't use dedicated memory, not such an issue for AMD which stuck with HT, but for Intel that would mean re-integrating the otherwise-unnecessary high-speed bus between the CPU and the chipset on their consumer parts, since the memory controllers are on-die.
  • Morawka - Tuesday, February 10, 2015 - link

    it's not intel's fault they make a high performing product.

    Their Engineer's invented the patents, and was funded by Intel's billions spent on R&D. The R&D (Research and Development) cost has to be recovered somehow. Not by just products sold.

    If anyone could get away with a straight copy of technology, then companies would not make them. And we sure as hell wouldn't get all the technical information we get now adays. It would be all closed and nobody would learn.
  • djscrew - Monday, February 9, 2015 - link

    this comment lacks logic

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