The monopoly storm has passed, Qualcomm is in the wearable market

The world's largest manufacturer of mobile device chips is looking to expand the footprint and extend it to the wearable world of automobiles and homes, and it may become within reach of the next few years.

At a shareholder meeting in New York last week, Qualcomm president Steve Mollenkopf told analysts, "Today's car is really a great platform for integrating smartphone technology."

Qualcomm is developing technologies that allow cars to “see” and “communicate” each other. This will stimulate the development of the Internet of Things and accelerate the process of bringing all devices together. From the tube to the clothing, from the thermostat to the stove, everything can be connected to the Internet. The company is also marching into the tablet.

With the slowdown in sales of smartphones, Qualcomm is planning to find new ways to find new devices. The management said that they will continue to be optimistic about the mobile phone chip business of their own companies, especially in the low-end and mid-end market, as well as looking for business opportunities in the automotive, home and urban construction. Qualcomm’s total revenue for the last fiscal year was $26.5 billion, but more than $1 billion was raised for related new areas.

The monopoly storm has passed, Qualcomm is in the wearable market

Qualcomm’s move was spurred by two major rivals: Intel began selling wearables this year, and Nvidia now also sells tablets and hand-held gaming systems.

Mike Walkley, an analyst at investment bank Jiatong Bexiang, pointed out that with the increase in networkable devices, Qualcomm's move into new markets can accelerate the development of Qualcomm. Since smartphones are likely to become integrated controllers for devices, the strategy adopted by Qualcomm is undoubtedly reasonable.

Qualcomm also announced plans to promote chips to the data center. This move will put GPU of Qualcomm and current server chips in the new platform. This market is likely to reach $20 billion worldwide in 2020.

Mollenkopf said: "It takes some time to set up the market, but we think this is a very fun opportunity."

Qualcomm intends to enter the server, which can be seen as a desire to compete with Intel. Intel has developed rapidly in recent years, although it is still not enough on the mobile chip.

Intel commented on Qualcomm's server entry plan last week. “We will take every competition seriously. We are confident in our current products, product lines, innovation capabilities and ability to meet customer needs, and we welcome our competitors to challenge.”

The reason why Qualcomm announced so many new moves is because of a previous problem in China - Qualcomm is suspected of violating the anti-monopoly law and is accepting investigations by the Chinese government. Qualcomm’s management frequently referred to China, but did not mention the details of the investigation or the date of the investigation.

The Qualcomm case or the end of the year results in a fine of 1 billion US dollars

China may end its investigation of Qualcomm by the end of the year, with fines exceeding $1 billion and creating new records. Qualcomm may agree to substantially adjust its patent licensing model.

The news of the anti-monopoly investigation of large foreign companies was one after another in the summer, but suddenly there was no news in the fall. However, the news seems to be on the headlines soon, because there are signs that the NDRC is preparing to impose a record anti-monopoly penalty on mobile phone chip maker Qualcomm.

It must be acknowledged that there has been a change in the beginning of the antitrust investigation. The survey began in the summer and initially involved companies including Qualcomm, Microsoft and most luxury car manufacturers. Audi in Germany was fined about $40 million.

That is, the investigation seems to be unfairly targeted at multinational corporations. Qualcomm was almost certainly investigated because of complaints from domestic smartphone manufacturers such as Huawei and ZTE. However, there is news that the United States and Europe have recently launched a similar survey on Qualcomm, which is one of the factors that change the point of view. Reports on the Qualcomm patent licensing model also seem to indicate that the company's approach to customers is excessive.

There are growing signs that the survey for Qualcomm may be coming to an end, and the final fine may be much higher than Audi's $40 million ticket. The fine may even be higher than the nearly $500 million fine that GlaxoSmithKline received in June for bribing medical staff.

According to the report, Qualcomm chairman Paul Jacobs said in China last week that the company is in difficult negotiations with the NDRC to try to resolve differences in its patent licensing practices. Qualcomm CEO Steve Mollenkopf talked about the problems encountered in China on the company's annual investor day and gave a more conservative outlook for the next five years than usual.

The investigation for Qualcomm is about to end, and a solution should be announced before the end of the year. The fine may exceed $1 billion, and Qualcomm will change the patent licensing model, which will have a big impact on Qualcomm's revenue growth.

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