It seems like the future of QCOM all depends on China government's decision. Is it rosy or gloomy? Our team's managers (including VP) seem pretty sure Q would resolve this problem smoothly despite of potential a billion dollar of fine, and then the stock would definitely go up. But, I can't buy that naive speculation. What's your speculations and outlooks? Right, I'm more concerned about my RSU and ESPP.
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Bloomberg has reported, source from anonymous insiders, China will ask for lower patent fee, a lot lower based on components instead of phone units in existing scheme. This will impact both licensing fee and chip sale. I am worried that many talented IC designers will be let go.
I think we should worry about Chine, we make 12 billion dollars, 1/2 of our global revenues in China, I would be concerned indeed. This is the ground zero for us, and if we get screwed like pharma companies did, we will undergo even a bigger hit. All of this hoopla that's happening right now is directly connected to the lost of revenue from China, all other threads are just noise, China is in the epicenter of things for us right now.
I would not worry. China’s decision is the only one that can do damage. All others can be delayed with legal tactics. Qualcomm has one of the biggest legal team, and cash can buy more. EU and US regulatory bodies are pretty much ineffective for the time they take in investigation, and they can be stalled with legal challenges.
Although the most immediate focus is on China’s anti-monopoly ruling, Qualcomm is still fighting other global investigations, in EU and US, and Qualcomm has received punitive rulings from Japan and Korean. That pretty much put Qualcomm at odds with government bodies on every continent. Qualcomm’s stock price is heavily dependent on its ability to collect royalty based on the current model, which is being challenged. No one in the tech community agrees with this model. On top of that, Qualcomm’s chip business seems to conflict with the spirit of licensing. So far, every ruling has been against Qualcomm, and China’ ruling is expected to be no less.
A new joiner here, can you help me understand how Snowden is connected to this thread. Thank you...
With the Snowden revelations on US spying, i think the chinese government is trying to get even. Dismantling the licensing model will level the playing field and put us (a large US company) in a difficult position. We aren't the only ones suffering..look at cisco as well. Therefore, I don't think the licensing issue will be resolved and bonuses and the stock price will suffer.
what is China's "nuclear option" and how many ghost cities can be built from the penalty it extracts?
The problem with China is that they don't really have private sector companies so its not really a apples to apples match. If you follow the money they are backed with heavy government support. I don't think it looks good for Qualcomm. The Chinese government is hellbent on not letting Qualcomm succeed in China and they have deeper pockets than we do. Anyone who has seen how awful TDSCDMA is can attest to this.