Qualcomm, Inc. (QCOM) Sets Out To Woo Beijing After It Lost The Biggest Anti-Trust Case
Qualcomm, Inc. (NASDAQ:QCOM) is out to contain the impact of its devastating loss of an antitrust case in China. The company is seeking to convince Beijing that it has a win-win formula that would see it help grow local IT sector while continue to play a key role in the market. Qualcomm has already broken ground for a new semiconductor plant in one of China’s provinces, which is part of the multiple efforts to support the development of China’s domestic IT industry.
Qualcomm suffered a crashing defeat in China when authorities in the country found it in violation of domestic anti-competition laws. The company was found to be overcharging local mobile manufacturers for the technology they license from it. As a result, Qualcomm was fined $975 million for the violations and will be slashing royalties it charges Chinese manufacturers that use its technology.
However, Qualcomm, Inc. (NASDAQ:QCOM) holds that despite the fallout with the Chinese authorities, there is still an opportunity to make more gains in the market. The company is looking at opportunities such as helping China towards building its own IT sector and protecting Chinese companies against potential patent disputes in the international markets. These are some of the win-win strategies that the company is trying to sell to Beijing in post-antitrust showdown.
Developing China’s IT sector
Towards building China’s IT industry, Qualcomm, Inc. (NASDAQ:QCOM) has started work to develop a new semiconductor factor in the Chinese province of Fujian. Qualcomm is not alone in trying to make China comfortable with foreign companies. International Business Machines Corp. (NYSE:IBM) also has a similar strategy to support the building of China’s IT sector while still remaining a key player in the market. IBM has and continues to collaborate with local IT companies towards building their capacity.
Protection in foreign markets
Qualcomm, Inc. (NASDAQ:QCOM) also believes it can make more money from Chinese device manufacturers outside the domestic market. When Ericsson (ADR) (NASDAQ:ERIC) took on Xiaomi in India for infringing its wireless patents, Ericsson excused Xiaomi’s products that used Qualcomm chips. That means that using Qualcomm chips could help Chinese manufacturers avoid potential patent fights abroad, which should get them coming to Qualcomm to license technology.
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