Qualcomm executives interpret earnings: Apple patent case ruling does not affect authorized business


Qualcomm executives interpret earnings: Apple patent case ruling does not affect authorized business

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Sina Technologies News Beijing time November 8 morning news, Qualcomm today released the fourth quarter of fiscal year 2018 results. Qualcomm reported a net loss of $500 million in the fourth quarter, compared with a net profit of $200 million in the same period last year, and revenue of $5.8 billion, down 2% from $5.9 billion in the same period last year.

After the results were released, Qualcomm CEO Steve Mollenkopf, President Cristiano Amon, CFO George Davis, Executive Vice President Alexander Rogers and General Counsel Donald Rosenberg The company's executives attended the subsequent earnings teleconference, interpreted the main points of earnings and answered the analyst's questions.

The following is the main content of this conference call Q & a session.

Romit Shah, Nomura Securities Analyst: The recent statement by the U.S. International Trade Commission is in the company's favor, but there is no ban on the sale, and it does not seem to have any impact on the development of Apple. How do the company comment?

Donald Rosenberg: You may be referring to the position of a judge of the International Trade Commission (ITC) on the outcome of the first trial of the case, which is now in the final stage. We are glad that ITC has decided that Apple infringed Qualcomm's patent, but we obviously disagree with its decision not to enforce the ban. We will invite ITC to communicate with it in other ways.

Romit Shah: will China punish apple for that ruling? Or will you take the same stance as the United States?

Donald Rosenberg: The company has filed more than 20 patent infringement lawsuits in China. Intellectual property courts are very powerful in protecting our patents. Many decisions contain injunctions. We will continue to follow up on the execution of these cases, and we are very satisfied with the results of these judgments. The company also analyzed the legal effects of these lawsuits. Only one of these lawsuits in China failed to win. The legal effects of other lawsuits were recognized by the State Intellectual Property Office of China.

Analyst: Will the company's outlook for next year change because Bloom's plan to acquire Qualcomm has not taken shape? Other factors that may need to be considered include legal costs, the decline in the smartphone market and the reduction in repo.

George Davis: The trading period for Encyclopedia was extended from April to July, then the last quarter ended, and the corresponding capital return plan was put in place in August, which changed things a lot because the value added after the company announced repurchase was very large compared with that of Encyclopedia from the beginning. In contrast, when a company announces a repurchase, adding an authorization scheme can bring higher value added. Compared with the view at the beginning of last year, we think that the growth of the mobile phone market is not very good this year and next. Other smaller factors are higher interest rates and higher operating expenses due to excessive litigation. But most importantly, the factors that drive the company's earnings growth are mainly high-end processors. Growth is still there. At present, it is more important to resolve the lawsuit with Apple, and the impact of the settlement, such as the re-cooperation of products, and the subsequent value-added. We also expect that the performance in 2020 and 2021 will be positively affected by the 5G business.

Timothy Long: Will ITC's ruling affect the company's authorization of router manufacturers? Will it have an impact on Apple's partners?

Donald Rosenberg: It's been a practice for many years that our competitors are free to sell chips to equipment manufacturers, because we have licenses for equipment manufacturers and we don't have to pay for them. As long as the equipment manufacturer is authorized, it does not need to be authorized at the spare parts level. This rule has long been recognized by industry and industry authorities, so I think the ITC judge's statement is wrong and needs to wait for a new judgment in January.

In the near future, the ruling has no impact on Apple and its partners, because we have authorization for them, and the current ruling is not complete, not final, and we will continue to voice in the courts and continue to grant our patents worldwide.

Alexander Rogers: The value of the company's licensing of processors and cellular networks is primarily at the system and device level, which will not change as a result of the current judgment. In addition, we have dealt with similar cases before, so it will not have a destructive impact on the company's authorized business.

Steve Morenkov: Our main focus is on how to deal with this lawsuit. It has no impact on the normal operation of the company. It will not change our usual practice because of the lawsuit ruling. (Tian Heng)

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