Qualcomm's Q2 revenue beats expectations despite Apple dispute

By:
James Pearce
Published on:

Chipset-maker Qualcomm saw its Q2 revenue fall 10% year on year, but blamed a royalties dispute with BlackBerry over its ongoing legal battle with Apple

Qualcomm saw second quarter revenues fall 10% year on year, a drop it blamed on arbitration over a royalties dispute with phone-maker BlackBerry.

The chipset-maker posted revenue of $5.02 billion for the three months ending 26 March 2017. However, on an adjusted basis it saw revenues of $5.99 billion – $100 million more than analysts estimates.

The stronger results came as Qualcomm has been locked in a war of words with Apple, a long term partner which launched a $1 billion lawsuit in January accusing Qualcomm of refusing to pay rebates it allegedly owes.

Apple also accused Qualcomm of overcharging for its array of patent licenses, though Qualcomm has since filed a countersuit, accusing the iPhone-maker of releasing misleading statements about its chip performance.

Qualcomm is also facing investigations and appeals from a number of regulators, including the US trade watchdog the Federal Trade Commission, and the South Korea Fair Trade Commission.

The ongoing legal and regulatory issues dominated a post-earnings conference call, in which Qualcomm president Derek Aberle claimed there had been no impact form the disputes on this latest set of figures.

“The agreement itself with Apple, which is where we have the dispute over what is owed to them, expired at the end of 2016, so it has really no relevance or impact to what the contract manufacturers would owe us for sales during the March quarter,” Aberle said.

“The terms under those agreements, I think were grossly mischaracterized in Apple’s submissions,” Aberle added. “So, yes, we’ve had to have some discussions with licensees to try to clarify what it is and isn’t, but I would say that’s sort of normal-course discussions we would typically have with companies.”