The world’s largest manufacturer of smart phone chips, Qualcomm, was fined close to $1 billion in China in 2015. The fine came after Qualcomm was found guilty of breaching national antitrust regulations. The firm has been very cautious since then, and has spent the whole of last year amending licensing agreements. The company has now announced a deal with Chinese smart phone maker Meizu.
Meizu is one of China’s leading designer brand for high tech products. Founded in 2003, it produces affordable devices which tussle with Xiaomi and other leading brands. Meizu counts Alibaba among its investors. The company claims to have reached a consumer base of over 20 million in 2015, however it had to make some layoffs in the following year.
In June 2016, Qualcomm filed a patent infringement complaints against Meizu, declaring that they had spent more than a year negotiating in good faith with Meizu for signing a license agreement. Now though, the companies appear to have reached an amicable point and Meizu has finally entered an alliance with Qualcomm. After being granted the license, Qualcomm returned the favor by dropping its legal cases against Meizu in China, France, Germany and the U.S.
Qualcomm stated that it has license with over 100 Chinese companies, and its partnership with Meizu will be followed by Vivo and Oppo, which are world’s fourth and fifth largest smart phone sellers. Deals with Hisense, Yulong and Lenovo are next in thread.
China is considered to be a huge market for smart phones and considering this fact, Qualcomm’s newly made alliances will be very fruitful. In fact, they even stated that the company’s impressive Q4 financial result in 2016 was highly influenced by its new licensing deals from China. The firm has witnessed a net income rise of 51% year-on-year to reach 1.6 billion since then.
Meanwhile, its growing presence in China bodes well for the Qualcomm’s future prospects — specially considering that China produces a significant portion of the world’s annual smartphone output.
