Qualcomm complies: pays $1 billion to settle antitrust dispute in China
Weep not for the silicon slinger, though – while this is a record-breaking fine, Qualcomm is fully aware of what the Chinese market means to it – half of its $26.5 billion revenue has been earned there. Furthermore, being able to freely operate in the country will allow Qualcomm to better meet up-and-comers, such as MediaTek, who has slowly been gaining grounds in the lower range markets.
The whole ordeal caused Qualcomm to drop its yearly forecasts to between $3.57 - $3.76 per share, from $4.04 - $4.34 per share, however, when the fine and one-time expenses are excluded, the company raises the lower end of its previous forecast – from $4.75 - $5.05 per share, to $4.85 - $5.05 per share.
So, Qualcomm will pay a $975 million fine and will, from now on, calculate its royalty rates in China based on 65% of the phone's selling price. This begs the question – will such cases follow in Europe and in the US, seeing as Qualcomm will continue to collect full royalties in these regions?