Qualcomm’s public licensing spat with Apple, and subsequent non-payment of royalties by manufacturers, contributed to a 40 per cent year-on-year drop in the chip company’s fiscal Q3 profit.
Speaking on a call to investors, CEO Steven Mollenkopf (pictured) said it “retained the high ground” in its ongoing licensing row and said the long-term outlook for the licensing segment of its business “remained strong”.
Qualcomm reported revenue of $5.4 billion for the three months to 25 June, down 11 per cent year on year, as net income fell to $900 million. In its earnings statement, the company warned the ongoing action would also negatively impact its results for fiscal Q4, and until the dispute was resolved.
The company’s arm dealing with chip sales generated a 58 per cent year-on-year increase in pre-tax earnings to $575 million, while the figure at its licensing division declined 51 per cent to $854 million.
Due to the volume of withheld royalty payments from Apple’s contracted manufacturers, the company did not record specific device-related figures for the period.
Lawsuits
“Despite the near term financial impact to our business by the actions of a small number of powerful industry players, the long-term outlook for our licensing business continues to remain strong,” Mollenkopf told investors.
“We believe we hold the high ground with regard to the dispute with Apple. We will take the actions that are needed and appropriately defend the tremendous value that our innovations bring to this industry.”
“As you know, we have a strong relationship with Apple for many years and they have been a long standing and valued customer. We intend to continue to provide them with our industry leading products and technologies as we always have, and do our best to remain a good supplier to Apple even while this dispute continues.”
Apple and Qualcomm are currently in a legal dispute on licensing terms, which has rumbled on since January and seen lawsuits launched from both sides across a number of geographies.
In addition to the legal action, several Apple-contracted manufacturers are withholding royalty payments.
