Qualcomm takes dive after missed projections
Chipmaker hit by cheap competitors, dragging patent talks in China
Mobile chipmaker Qualcomm missed analysts' projections as competition heated up between the US firm and its Asian rivals, Reuters reported.
The San Diego, California-based manufacturer saw its share price slip 6% yesterday. The company's woes have been compounded by slow progress in license-agreement talks with two major Chinese customers.
Company president Derek Aberle claimed some Chinese customers were "improperly withholding" payments on the use of Qualcomm's patents through a change in accounting practices.
Half of Qualcomm's 2014 revenue came from Chinese buyers.
Chief executive Steve Mollenkopf has engaged in a cost-cutting scheme that includes a workforce reduction. He faces an industry where demand for Qualcomm's high-end Snapdragon chipsets is waning as emerging markets cry out for cheaper handsets and major customers such as South Korea's Samsung electronics opt to build their own processors to slash costs.
However Qualcomm yesterday claimed that current-quarter demand for the latest Snapdragon version was greater than expected. And Samsung is reportedly considering the use of the Snapdragon 820 chipset in its Galaxy S7 range.