Qualcomm Struck With a Profit-Plummeting Truck – 90% Drop in Profits Thanks to Legal Battle With Apple
In its legal spat with Apple, Qualcomm has posted quarterly earnings of an 89.7 percent decline in profits as the chipset manufacturer is facing a massive $778 million fine from Taiwanese regulators.
For Its Fourth Fiscal Quarter, Qualcomm Posted a Net Income of Just $168 Million
The aforementioned figure is down $1.6 billion in 2016, according to a report from Reuters. EPS value came out as 92 cents, while revenue generated was $5.91 billion. Though Qualcomm managed to beat expectations of Wall Street, it does note that its earnings were negatively impacted thanks to the actions of Apple and its contract manufacturers.
Qualcomm is currently embroiled in an intensifying legal battle with Apple, which has been scattered in multiple jurisdictions around the world. Apple, on the other hand, has continued to withhold patent licensing fees attributable to iPhone and iPad as the two companies have locked horns in an ongoing skirmish in court.
Even Qualcomm’s CEO, Mollenkopf wants things to end on a good note but it does not look like this is going to happen for a long time. Apple employs Qualcomm’s LTE chips in its iPhone lineup and before the inception of the iPhone 7 and iPhone 7 Plus, the chipmaker was the sole provider of connectivity modems.
It has been reported that Apple might start designing iPhones and iPads that will forgo the use of Qualcomm connectivity modems in favor of Intel and MediaTek. However, analysts are not positive if the outcome turns out to be true. This is because Qualcomm’s modems are much faster in speeds and the manufacturer is the biggest supplier of these chips.
Even though this has been an abysmal financial run for Qualcomm for this quarter, Moor Insights & Strategy analyst Patrick Moorhead has stated that the company would do just fine even if it lost Apple as a partner.
News Source: Reuters