NDRC investigates Qualcomm on anti-trust grounds
Qualcomm Inc, the world's biggest cellphone chip maker, is under an anti-trust investigation by the National Development and Reform Commission. The investigation started last year and the NDRC is holding talks with the US company. Violation could mean a record fine exceeding $1 billion.
The world's biggest cell phone chip maker Qualcomm now comfortably positioned to reap the vast majority of licensing fees for the chip sets used by handsets in China, the world's biggest smartphone market.
But that may change soon. The National Development and Reform Commission says there's "substantial evidence" against Qualcomm in an antitrust probe launched last year.
And now China's cell phone and chip makers are coming forward with their complaints against Qualcomm.
"What's happening to China's mobile phone industry now is like what happened to its DVD industry years back. The patent holders charged exorbitant fees and took all the profits. There’s nothing left for the Chinese industry but manufacturing." China Mobile Phone Alliance secretary-general Wang Yanghui said.
In its defense, Qualcomm says it invested billions of dollars in developing its patents, and called the rate it's charging Chinese cell phone makers "reasonable".
For Chinese companies using Qualcomm's patents, they say they're willing to pay but Qualcomm is going to far.
"Patent fee is a universal and core issue, especially now that we're transitioning into a 4G era." Coolpad Group's deputy general manager Li Bin said.
What both sides can agree on is that Qualcomm has core technologies that Chinese cell phone makers, many of which lack their own R&D capabilities, desperately need. The focal point of the argument is money. According to data firm Canalys, shipments of 4G enabled smartphones, many of which use Qualcomm's technology, are expected to top half a billion units in China in 2015.