Android vendors could move to renegotiate their royalty agreements with US chipmaker Qualcomm even as the company wades through an ongoing patent licensing dispute with Apple, Digitimes reported.
At an investor conference, Qualcomm indicated at least one unspecified China-based smartphone vendor has already stopped making its royalty payments. Sources told Digitimes that unnamed vendor is Huawei, and hinted Samsung could be the next in line to put payments on hold while it tries to secure a more favourable agreement.
The latter would follow a verdict from South Korea’s Fair Trade Commission that fined Qualcomm $912 million for abusing its dominant market position in linking modem sales to patent licensing deals and ordered the company to renegotiate chip supply agreements with mobile vendors.
Qualcomm could not immediately be reached for comment.
The news comes as Qualcomm continues a high profile dispute with Apple, which has weighed on Qualcomm’s financial performance. In Q3, Qualcomm’s profit plunged nearly 90 per cent and licensing revenues dropped by 36 per cent to $1.2 billion.
Qualcomm earns more than half of its revenue in China, and Digitimes noted the loss of Huawei could shave as much as another 10 per cent off Qualcomm’s royalty revenue.
However, Qualcomm is pushing ahead with other deals with Android vendors, including a recently announced $12 billion component agreement with Chinese smartphone makers Xiaomi, Oppo and Vivo.