Qualcomm says China virus threatens phone industry disruption

Qualcomm Inc raised concerns around the threat to the mobile phone industry's supply chain from the coronavirus outbreak in China, dragging down shares.

On a conference call with investors, Chief Financial Officer Akash Palkhiwala said Qualcomm expects "significant uncertainty around the impact from the coronavirus on handset demand and supply chain."

Shares fell 3.3 percent in after-hours trade.

The San Diego-based chip supplier forecast second-quarter revenue largely above Wall Street estimates on Wednesday, in the latest sign that a protracted slowdown in the global chip industry is easing.

Qualcomm is the world's biggest supplier of "modem" chips that connect mobile phones and other devices to wireless data networks. 

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5G adoption to outpace 4G, says Qualcomm

Qualcomm Inc expects global smartphone makers to ship 450 million 5G handsets in 2021 and another 750 million in 2022, the world's largest supplier of mobile phone chips said on Tuesday.

Adoption of 5G will be faster than 4G due to the timing of commercialization of the technology in China and availability of chipsets across different price tiers, Qualcomm said.

Going by Qualcomm's previous forecast of a range between 175 million and 225 million 5G devices for next year, the 2021 forecast suggests 125 percent growth from the midpoint of the 2020 outlook.

Analysts attach importance to occasional smartphone estimate figures from Qualcomm, given its close relationship with phone makers.

Verizon Communications Inc, in a presentation to analysts after markets close, said it expects revenue from 5G growth opportunities to increase next year and anticipates launching 5G in more than 30 cities by the end of this year.

Next-generation 5G smartphones are expected to make tasks like watching videos or playing games on mobile networks as good as or better than on a Wi-Fi connection.

Qualcomm and its rivals stand to benefit from faster 5G adoption because the phones will require more chips to gain the speed boost.

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Qualcomm shares slide after US antitrust ruling

WASHINGTON - Smartphone chip giant Qualcomm suffered a fresh blow in its antitrust battle with a US federal judge's ruling that it "strangled competition" for years at the expense of consumers and device makers.

Shares in Qualcomm sank some eight percent in opening trading Wednesday after the ruling that the company violated antitrust law, in a case with major implications for the smartphone market.

Judge Lucy H. Koh of the northern district of California ordered Qualcomm to change its pricing and sales practices, after finding it "engaged in anticompetitive conduct" towards customers like Sony, Samsung and China's Huawei.

"Qualcomm's licensing practices have strangled competition" in the chip market for years, "and harmed rivals," she said in the ruling Tuesday in the lawsuit brought by the US Federal Trade Commission.

She added that Qualcomm's abusive tactics have been continuing and that it "is likely to replicate its market dominance during the transition to 5G, the next generation of modem chips."

The California-based company's shares had soared after reaching a settlement with Apple last month over royalty payments for chips used in smartphones, which was expected to generate a windfall of $4.5 billion.

But the 230-page ruling showed the company violated the law by using "unfair methods of competition."

The company said it will seek an expedited appeal of the ruling.

"We strongly disagree with the judge's conclusions, her interpretation of the facts and her application of the law," Don Rosenberg, Qualcomm executive vice president and general counsel, said in a statement.

Koh cited statements from company executives that showed the "unlawful practices are 'ongoing' or likely to recur" since they were part of the firm's strategy and it maintains a dominant position in the market.

The judge ruled that Qualcomm must negotiate terms for its patents on fair and reasonable terms without using threats or discriminatory tactics.

"Qualcomm must not condition the supply of modem chips on a customer's patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access," the judge wrote.

John Bergmayer of the consumer group Public Knowledge said of the decision: "We congratulate the FTC on this important victory. Judge Koh's ruling shows that the FTC has the ability to bring, and win, important cases that protect American consumers."

The ruling marked the latest setback for Qualcomm which has faced antitrust litigation in Europe, South Korea and China.

Qualcomm's woes appeared to ease earlier this month when it agreed with Apple to settle all worldwide litigation in what had been a sprawling battle over royalty payments.

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EXPLAINER: How 5G drove moves by Apple, Qualcomm and Intel

SAN FRANCISCO, United States - Apple Inc. and Qualcomm Inc. on Tuesday settled an acrimonious two-year legal dispute. Shortly afterward, Intel Corp said it would exit the smartphone modem chip business.

The entire drama played out as the mobile phone industry prepares to shift to a technology called 5G.

Echoing complaints from the US Federal Trade Commission, Apple had alleged that Qualcomm used its patent licensing business to keep a monopoly on modem chips that connect devices like the iPhone to wireless data networks. Qualcomm insisted that Apple was using its valuable technology with proper payment, and Apple later dropped Qualcomm's chips in favor of those from Intel.

In the end, Apple and Qualcomm ceased all litigation, with Apple signing a six-year licensing deal with Qualcomm and also agreeing to buy Qualcomm chips. Hours later, Intel said it was getting out of the modem chip business.

WHAT IS 5G?

5G is a new network technology for wireless communications that could be up to 100 times faster than current 4G networks. The networks are coming on line in the United States, China, South Korea and other places this year, but probably will not be widespread until 2020. Modem chips connect devices like phones to these networks.

WHO ARE THE PLAYERS IN 5G?

Prior to Tuesday, 5 companies had disclosed 5G modem chips or plans to make them: Qualcomm, Intel, MediaTek Inc. , Huawei Technologies Co. Ltd. and Samsung Electronics Co. Ltd. Samsung and Huawei, however, only make chips for their own mobile phones.

WHY DOES APPLE CARE ABOUT 5G?

Some of Apple's rivals in the smartphone market - notably Samsung - plan to release 5G devices this year, which could put pressure on Apple to match the feature. Many carriers that are investing heavily to build 5G networks are also likely to put their marketing efforts behind 5G phones.

WILL APPLE HAVE A 5G PHONE THIS YEAR?

It would require an extraordinary effort from both companies. New modems take months of testing to ensure phones will work on carrier networks. Under traditional time lines, Apple would have needed to start testing a 5G iPhone last year, but its supplier Intel did not have a chip ready.

WILL APPLE LOSE MARKET SHARE WITHOUT A 5G PHONE?

Apple was slow to 4G too and did not pay a price. Samsung and others released 4G phones in 2011 as the networks were rolling out. Apple waited until 2012, when 4G networks become widely accessible. Many analysts believe Apple is making the same bet with 5G.

WHY DOES APPLE NEED QUALCOMM'S CHIPS?

Apple's only current modem supplier, Intel, said that it would not have a 5G chip ready until 2020, which could have pushed Apple's launch of a 5G iPhone into 2021 - a long enough delay that it could hurt sales. Qualcomm, on the other hand, is preparing to ship its second generation 5G chip and can meet Apple's needs with its current products.

WILL APPLE EXCLUSIVELY USE QUALCOMM'S CHIPS?

Not necessarily. While Apple and Qualcomm signed a supply agreement, Apple is working on developing its own modems and disclosed in court earlier this year that it has held talks with MediaTek and Samsung around modems.

WHY DID INTEL SHARE RISE AFTER IT EXITED THE MODEM BUSINESS?

Intel Chief Executive Bob Swan has told investors in the past that modem chips are not likely to fetch the same high margins as its CPU chips. Intel has plenty of other ways to make money from 5G, like selling CPUs to makers of base stations and so-called programmable chips to makers of networking gear.

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Apple, Qualcomm bury the hatchet in royalties battle royal

SAN FRANCISCO -- Apple and American microchip manufacturer Qualcomm said Tuesday they have agreed to "dismiss all litigation" against each other worldwide in what had been a sprawling battle over royalty payments.

The last-minute settlement cut short a courtroom clash between the tech giants just as it was getting underway in California. 

For 2 years the companies had fought a multi-front brawl that could have required Qualcomm to pay billions.

The news sent Qualcomm's stock price soaring more than 23 percent on Wall Street, its best one-day performance in nearly 20 years.

The deal includes a 6-year license agreement with the option to extend for 2 years, and a payment to Qualcomm from Apple, the companies said.

At the heart of the battle were the royalties Qualcomm charges for its patented chips, which enable smartphones to connect to mobile networks.

Apple accused Qualcomm, which holds the most patents for chips, of taking advantage of its dominant position to charge exorbitant amounts for its chips or access to its patents.

Qualcomm denied the allegations and accused Apple of abusing its position and of taking legal action to negotiate prices down.

"I believe both Apple and Qualcomm got deeper into this than they wanted to," analyst Patrick Moorhead of Moor Insights & Strategy said in a statement.

"This settlement should be good for the wireless industry as companies should feel free to invest in research, get paid a fair price for those inventions, and consumers take advantage of those innovations at a very rapid pace."

RECENT DEFEATS FOR QUALCOMM

The stakes had been especially high for Qualcomm given that it earns a significant chunk of its revenue from royalties paid by manufacturers for its patented technology. 

Apple had argued that Qualcomm's royalty demands meant it was effectively insisting on payment for innovations by Apple -- such as touch ID or Apple Pay -- that Qualcomm "had nothing to do with."

Apple said it had been overcharged by billions as a result and, following its initial US lawsuit, the iPhone maker filed two more suits in China on the same basis. Qualcomm counter-sued.

Also in early 2017, the US Federal Trade Commission sued Qualcomm for alleged antitrust law violations in the sale of certain components and licenses to smartphone makers, including Apple.

In April 2017, it was forced to pay $815 million to Canada's Blackberry in a royalties dispute.

And since 2015, through both convictions and settlements, it has paid high antitrust fines in China, South Korea, Taiwan and the European Union.

This has led to contradictory legal rulings. In March, a US court ruled in Apple's favor, a few hours after a judge of the same court ordered a partial ban of iPhone imports.

Meanwhile, by the end of 2018, Qualcomm had secured a ban on the sale of certain iPhones in China and Germany -- again for patent violations.

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Apple infringed three Qualcomm patents, jury finds

Mobile phone chip supplier Qualcomm Inc on Friday won a legal victory against iPhone maker Apple Inc, with a jury in federal court in San Diego finding that Apple owes Qualcomm about $31 million for infringing three of its patents.

Qualcomm last year sued Apple alleging it had violated patents related to helping mobile phones get better battery life. During an eight-day trial, Qualcomm asked the jury to award it unpaid patent royalties of up to $1.41 per iPhone that violated the patents.

The $31 million penalty is small change for Apple, the second most valuable U.S. company after Microsoft Corp, with a market value of $866 billion and annual revenue totaling hundreds of billions of dollars. But the setting of a per-phone royalty rate for Qualcomm's technology gives the chip supplier a fresh line of attack in its two-year old legal battle with Apple.

The biggest case, filed by Apple in early 2017, begins in April. Apple has sought to dismantle what it calls Qualcomm's illegal business model of both licensing patents and selling chips to phone makers. Qualcomm has accused Apple of using its technology without paying.

"The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly," Don Rosenberg, Qualcomm's general counsel, said in a statement. "We are gratified that courts all over the world are rejecting Apple's strategy of refusing to pay for the use of our IP."

In a statement, Apple said it was disappointed with the outcome.

"Qualcomm's ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in U.S. federal court, and around the world," Apple said. It declined to comment on whether it would appeal.

In other cases against Apple, Qualcomm has won sales bans on iPhones in Germany and China, though the Chinese ban has not been enforced and Apple has taken moves it believes allow it to resume sales in Germany.

Qualcomm also suffered a setback with U.S. trade regulators who found that some iPhones infringed one of the San Diego-based company's patents but declined to bar their importation into the United States, citing the damage such a move would inflict on rival Intel Corp.

The verdict on Friday could come into play in the trial in April because it puts a per-phone dollar figure on some of Qualcomm's intellectual property. Qualcomm's patent licensing model relies on charging phone makers a cut of the selling price of the phone, a practice Apple has alleged is unfair and illegal.

During an earlier trial between Qualcomm and the U.S. Federal Trade Commission, Apple executives outlined their company's extensive negotiations to reduce those license fees to $7.50 per phone for Qualcomm's patents.

The San Diego jury valued just three of Qualcomm's patents in the company's portfolio at $1.41, a figure that the chip supplier believes bolsters its contention that its licensing practices are fair.

"The three patents found to be infringed in this case represent just a small fraction of Qualcomm's valuable portfolio of tens of thousands of patents," Rosenberg said in a statement.

Gaston Kroub, a patent lawyer in New York not involved in the case, said the verdict was clearly a win for Qualcomm. But it does not say much about the value of Qualcomm's entire patent portfolio and was unlikely to spark settlements discussions, he said.

"Apple is very skilled at handling appeals and taking a longer-term view. This isn't something that will bring Apple to the table with any sense of urgency," Kroub said. 

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Apple to pull some iPhones in Germany as Qualcomm extends global wins

MUNICH/SAN FRANCISCO - Chip supplier Qualcomm Inc won a second court skirmish in its worldwide patent battle with Apple Inc on Thursday, with the iPhone maker saying it would pull some older models from its German stores.

Qualcomm's win in Germany comes weeks after it secured a court order to ban sales of some iPhone models in China. Apple, which is contesting both rulings, has continued to offer its iPhones in China but made changes to its iOS operating system in the wake of the Chinese order.

The German victory may affect only a few million iPhones out of the hundreds of millions that Apple sells each year. Still, it is a small but clear win in a complex legal battle that will spin into overdrive in the coming months as antitrust regulators and Apple both take Qualcomm to court in the United States.

Apple alleges that Qualcomm engaged in illegal behavior to preserve a monopoly on modem chips, which help mobile devices connect to wireless data networks. Qualcomm has in turn accused Apple of using the chip supplier's vast stable of technology innovations without proper compensation.

While a sales ban in China could hurt Apple's bottom line, it is unlikely the 2 patent skirmishes will sway the outcome of the broader battle, where Qualcomm has suffered a series of setbacks fighting US antitrust regulators.

Shares of Apple were down 2.3 percent at $157.12 in late trading, weighing on the broader market. Qualcomm shares were down 0.2 percent at $56.69.

Qualcomm is not pursuing the software patents in the Chinese case in other jurisdictions and suffered an early loss while pursuing a US sales ban on the US version of the hardware patent at issue in Germany.

OLDER PHONES PULLED

On Thursday, Apple said it would pull older iPhones from its German stores after a court ruled that Apple had infringed a hardware patent of Qualcomm Inc and banned sales of iPhones there with chips from Apple supplier Qorvo Inc.

“Two respected courts in 2 different jurisdictions just in the past 2 weeks have now confirmed the value of Qualcomm’s patents and declared Apple an infringer, ordering a ban on iPhones in the important markets of Germany and China,” Don Rosenberg, Qualcomm's general counsel, said in a statement.

For each of the 2 Apple entities it won orders against, Qualcomm needs to post a bond of about 668.4 million euros, or $765.9 million, before it can begin proceedings to enforce the order, a move Qualcomm said it would carry out "within a few days."

The smartphone maker said it was appealing the decision, but the order goes into effect as soon as Qualcomm posts the bond.

Apple said it would pull some phones from its stores while it pursued an appeal.

"We are of course disappointed by this verdict and we plan to appeal," Apple said in a statement. "All iPhone models remain available to customers through carriers and resellers in 4,300 locations across Germany. During the appeal process, iPhone 7 and iPhone 8 models will not be available at Apple’s 15 retail stores in Germany. iPhone XS, iPhone XS Max and iPhone XR will remain available in all our stores."

Stacy Rasgon, an analyst with research firm Bernstein, said in a note that Germany was a small iPhone market for Apple, selling about 10 million units a year, with possibly only half of those being the older models affected by the court's order.

When Qualcomm posts the bond to enforce the order, it could seek to extend the ban to Apple's resellers and the newer iPhone models not included thus far, legal experts said.

Qualcomm said the court had granted its request for "a recall and destruction of all accused devices from all retailers in Germany."

RISKS

But pressing forward with enforcement presents some risks for Qualcomm. In an earlier proceeding before the US International Trade Commission, US regulators viewed a more extensive set of technical evidence about whether Qorvo's chips and Apple's phones violated Qualcomm's patents.

Those US regulators sided with Apple and Qorvo. If higher courts in Germany do the same when Apple appeals, Qualcomm could be forced to forfeit its bond if the decision becomes final.

The German case is Qualcomm's third major effort to secure a ban on Apple's lucrative iPhones over patent infringement allegations after similar efforts in the US and China.

In the United States, Qualcomm sought to ban the import of iPhones with chips from Intel Corp. Trade regulators found Apple had infringed one Qualcomm patent, but so far declined to ban the phones with Intel chips because regulators feared it would hurt competition in the chip marketplace.

"Competition authorities around the world have repeatedly found Qualcomm’s licensing practices unlawful, yet Qualcomm continues to try to achieve the same results through a campaign of patent lawsuits," Steven Rodgers, Intel's general counsel, said in a statement after the ruling in Germany.

In Germany, the judge ruled that phones with a chip from Apple supplier Qorvo violate one of Qualcomm's patents around so-called envelope tracking, a feature that helps mobile phones save battery power while sending and receiving wireless signals.

Mike Baker, Qorvo’s chief intellectual property counsel, said in a statement that US trade regulators had ruled that Qorvo's chips did not violate the US version of Qualcomm's patent and that the chip's inventor wasn't allowed to testify at the German hearing.

“We believe our envelope tracking chip does not infringe the patent in suit, and the court would have come to a different conclusion if it had considered all the evidence," Baker said.

In China, Apple is still pursuing a so-called request for reconsideration with the court that issued the bans.

Apple said its phones remained on sale and it believed it has complied with the Chinese court's order, but it also made changes to its iPhone software in the wake of the ruling. Qualcomm believes Apple is violating the Chinese court order despite the new software and must stop selling phones there.

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China court bans iPhone sales in patent dispute: Qualcomm

WASHINGTON -- A Chinese court ordered a ban in the country on iPhone sales in a patent dispute, US chipmaking giant Qualcomm said Monday.

A Qualcomm statement said the Fuzhou Intermediate People's Court had granted its request for 2 preliminary injunctions against 4 subsidiaries of Apple, ordering them to immediately to stop selling the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X.

The move marked the latest in a long-running dispute over patents and royalties between the 2 California tech giants playing out in courts and administrative bodies worldwide.

"Apple continues to benefit from our intellectual property while refusing to compensate us. These court orders are further confirmation of the strength of Qualcomm's vast patent portfolio," said Don Rosenberg, Qualcomm executive vice president and general counsel in Monday's statement.

The China case is based on patents which enable consumers to adjust and reformat the size and appearance of photographs, and to manage applications using a touchscreen, Qualcomm said.

An Apple statement to AFP called Qualcomm's effort a "desperate move by a company whose illegal practices are under investigation by regulators around the world."

Apple added that Qualcomm "is asserting 3 patents they had never raised before, including one which has already been invalidated."

Apple said that "all iPhone models remain available for our customers in China," adding that "we will pursue all our legal options through the courts."

The Wall Street Journal said the order was issued November 30, and that iPhones remained on sale in the country. The court case does not affect the newest models, including the iPhone Xs and Xr.

The court action also comes amid a backdrop of increased trade tensions between Washington and Beijing and the arrest in Canada of a top executive of Chinese tech giant Huawei at the request of US authorities.

Beijing has reacted angrily to the arrest of Huawei chief financial officer Meng Wanzhou, the daughter of the company's founder, who faces US fraud charges related to alleged sanctions-breaking dealings with Iran.

APPLE'S CHINA STRATEGY

China has been an important market for Apple in recent years since China Mobile agreed to begin distributing the smartphones in 2014, and a number of Apple stores are open in China.

Apple's most recent quarterly report showed it brought in some $11 billion -- around 18 percent of its total revenues -- from "Greater China," a region which includes Taiwan and Hong Kong.

Apple chief executive Tim Cook has made regular visits to China, and has touted the company's inroads in the Chinese market as well as its manufacturing there.

Qualcomm, the leading supplier of chips for mobile devices, has been in a prolonged legal battle with Apple in recent years.

Apple has claimed that Qualcomm is abusing its market power over certain mobile chipsets in order to demand unfair royalties, joining a string of antitrust actions against the chipmaker.

Qualcomm has countersued Apple and earlier this year escalated its legal fight, claiming the iPhone maker stole trade secrets and shared them with mobile chip rival Intel.

According to Qualcomm's US lawsuit, Apple's goal was to buy mobile chips from Intel instead of depending on Qualcomm.

Qualcomm is facing antitrust probes in South Korea, the European Union and the United States over its dominant position.

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Apple, Qualcomm battle over possible ban on some US iPhone imports

The staff of the US International Trade Commission on Friday recommended that a trade judge find that Apple Inc infringed at least one of Qualcomm Inc's patents, a move that could lead to blocking the import of some iPhones.

The San Diego chipmaker filed a complaint against Apple nearly a year ago, asking the commission to ban the import of iPhones containing rival chipmaker Intel Corp's so-called modem chips, which help mobile phones connect to wireless data networks.

At a trial in Washington that started on Friday, the ITC staff said Apple violated one of Qualcomm's patents around battery-saving technology.

The ITC staff acts as a third party in such trade cases. The staff lawyers' opinions are not binding, but judges often follow them.

In previous filings in the ITC case, Apple has argued that Qualcomm's patents are invalid and that, regardless, the judge should not ban Intel-based iPhones because it would give Qualcomm a monopoly on modems in the United States and drive Intel out of the modem business.

“Qualcomm is selectively asserting its patents to target only Apple products containing Intel chipsets — even though its patent infringement allegations would apply equally to Apple products containing Qualcomm chipsets — in an attempt to use the ITC as another mechanism for perpetuating its ill-gotten monopoly position,” Apple wrote.

The ITC case is the first to go to trial out of more than a dozen legal fights between Apple and Qualcomm over patents, licensing practices and contracts. A decision is expected by January.

If the ITC judge decides to ban some iPhone imports, Qualcomm could use that to try to persuade Apple to settle or drop several of the other patent and contract cases, legal experts have said.

Apple has argued that some of Qualcomm's practices are illegal, and the chipmaker has paid billions of dollars in fines from antitrust regulators in several countries, though it is still appealing some of those rulings.

Qualcomm says its practices are legal and were accepted by customers for many years as the smartphone industry boomed, but it has made some changes to its licensing model of taking a cut of the selling price of a device in a bid to ease tensions with customers and regulators.

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Big tech tieup: Broadcom bids $130 billion for Qualcomm

WASHINGTON - In what could be the biggest deal ever in the tech sector, Broadcom on Monday bid $130 billion for rival chip maker Qualcomm to gain position in the booming sector fueled by growth in smartphones and an array of connected devices from cars to wearables.

The proposal by Singapore-based Broadcom, which has announced plans to return its domicile to the United States, would consolidate 2 major players in the semiconductor sector.

Broadcom's unsolicited offer amounts to $70 per share, including $60 in cash and $10 in Broadcom stock, or 28 percent above the closing price of Qualcomm on Thursday, before reports of the deal surfaced.

"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products," Broadcom chief executive Hock Tan said in a statement.

"With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value."

Qualcomm, based in San Diego, California, said it would "assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders."

News of the deal came days after Tan appeared at the White House with President Donald Trump to announce plans to move the tech company back to the United States from Singapore.

It comes as Qualcomm seeks a $47 billion acquisition of Dutch rival NXP, a deal that is the subject of an European Union anti-trust probe.

Broadcom, meanwhile, is seeking to buy US rival Brocade Communications in a deal being reviewed by Washington.

Broadcom and Qualcomm are both major makers of semiconductors used in the latest tech gadgetry.

The US firm is the leader in processors for smartphones and is expanding into new sectors, while Broadcom makes an array of chips for wireless communications, set-top boxes and electronic displays.

On Wall Street, Broadcom shares rose 1.4 percent and Qualcomm added 1.1 percent.

RBC Capital Markets analyst Amit Daryanan said in a research note that the deal "makes both financial and strategic sense" for Broadcom.

$51 BILLION GIANT

Combining the firms would create a behemoth with some $51 billion in revenues, including those from NXP.

But any deal would need to pass muster with Qualcomm shareholders and could face regulatory scrutiny in the United States and other markets.

Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment.

Last month, Qualcomm was fined more than $770 million in Taiwan for abusing its market dominance. It is facing similar challenges in several countries, including the United States. China and South Korea have already imposed heavy fines.

Qualcomm and Apple have also been locked in legal battles over royalty payments and patents.

Apple filed a US lawsuit in January accusing Qualcomm of abusing its market power for certain mobile chipsets to demand unfair royalties, and has also joined efforts in other countries where Qualcomm faces probes from antitrust authorities.

Qualcomm responded with its own claims against Apple and argued that the iPhone maker had been providing "false and misleading information" to antitrust authorities in an effort to reduce its royalty payments to Qualcomm.

ABI research analyst Stuart Carlaw said a combined Qualcomm/Broadcom operation would represent the third largest global semiconductor supplier.

"The Qualcomm shareholders are likely to be split with many viewing this opportunity as a solution to the worsening relations with Apple, whom Broadcom has a good relationship with," Carlaw said.

"The potential merger raises significant questions surrounding the difficult takeover of NXP by Qualcomm and much is still to be discerned regarding the value of the Qualcomm patent holdings and its associated lucrative high-margin revenue stream."

Broadcom was founded in 1991 by California researchers and moved its corporate headquarters to Singapore as part of a merger with Avago Technologies Ltd. while keeping many of its operations in Silicon Valley.

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Wall Street hits record high as investors eye mergers

U.S. stocks climbed to record highs on Monday, helped by optimism about merger activity and as investors bet that a Republican plan to cut corporate taxes would bolster earnings.

Qualcomm rose 1.15 percent after Broadcom offered to buy the smartphone chip supplier for $103 billion in what could be the biggest-ever acquisition in the tech sector. Broadcom added 1.42 percent.

"The fact that the deal is on the table is huge," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

"We have not seen much in the way of dealmaking this year. So this might jumpstart some of the dealmaking ahead of the tax policy changes."

Twenty-First Century Fox surged 9.93 percent after CNBC reported that the film and television conglomerate has held talks to sell most of the company to media giant Walt Disney Co .

Investor optimism was also fueled by a Republican proposal last week to slash the corporate tax rate to 20 percent from 35 percent and end some tax breaks for companies and individuals.

"I think that has to be the main driver," said John Brady, managing director at R.J. O'Brien & Associates in Chicago. "Even if it only goes to 25 percent or 27 percent, it's still moving the right way."

Apple rose 1.01 percent and contributed more than any other stock to the benchmark S&P 500 index's gain.

Shares of Sprint slumped 11.54 percent to more-than-a-year low after the wireless provider and T-Mobile called off a planned merger. T-Mobile lost 5.72 percent.

All three major indexes closed at record highs.

The Dow Jones Industrial Average inched up 0.04 percent to end at 23,548.42, while the S&P 500 gained 0.13 percent to 2,591.13.

The Nasdaq Composite added 0.33 percent to 6,786.44.

The S&P 500 energy index surged 2.2 percent on gains in crude prices after the crown price of Saudi Arabia, the world's largest oil exporter, tightened his grip on power through an anti-corruption purge.

U.S. companies continue to report quarterly earnings. With more than 400 of S&P 500 companies having reported, earnings for the third quarter are expected to have climbed 8 percent, compared with expectations of a 5.9 percent rise at the start of October, according to Thomson Reuters I/B/E/S.

Up 15 percent in 2017, the S&P 500 is trading at about 18 times expected earnings, according to Thomson Reuters Datastream.

Michael Kors jumped 14.70 percent after the fashion accessories maker raised its 2017 revenue forecast. The stock was the biggest percentage gainer on the S&P.

Advanced Micro Devices jumped 7.28 percent after a report that it plans to team up with Intel to form a personal computer chip unit. Intel was down marginally.

Advancing issues outnumbered declining ones on the NYSE by a 1.41-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers.

About 6.6 billion shares changed hands on U.S. exchanges, above the 6.4 billion daily average over the last 20 sessions.

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Samsung won't use Qualcomm chip for new Galaxy S: Bloomberg

SEOUL - Samsung Electronics Co Ltd will not use Qualcomm Inc's processors for the next version of the South Korean technology giant's flagship Galaxy S smartphone, Bloomberg reported on Wednesday, citing unnamed sources.

The report said Samsung, the world's top smartphone maker, tested the new Qualcomm Snapdragon 810 chip and decided not to use it, without offering details. Samsung will use its own processors instead, the report said.

A Qualcomm spokesman declined to comment on the report. A Samsung spokeswoman said the company does not comment on rumors.

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What's inside the iPhone 6 Plus?

SAN FRANCISCO - Apple's iPhone 6 Plus uses chips from Qualcomm, Skyworks Solution, Avago Technologies and other companies, according to gadget repair firm iFixit, which pried one of the devices open in Melbourne early on Friday.

Apple said it received a record 4 million first-day pre-orders for the new phones, double the number for the iPhone 5 two years ago, underscoring investors' expectations the new handset will maintain the Silicon Valley company's stellar growth.

The company is releasing a 4.7-inch iPhone 6 and 5.5-inch iPhone 6 Plus. They will support more than 200 telecoms carriers worldwide, with sales launching in Australia on Friday morning and then in the United States and other countries.

Like previous iPhones, the iPhone 6 Plus uses a Qualcomm 4G LTE modem, according to iFixit.

Dissembling the device in a Mac repair shop after lining up overnight to buy a phone, iFixit technicians also discovered a Murata wifi module, a Broadcom touchscreen controller, and chips from Skyworks, Avago and TriQuint.

News that a supplier has been chosen - or rejected - for one of Apple's products can sometimes cause drastic swings in stock prices. Apple doesn't disclose which companies make the components that go into its smartphones. It also imposes strict rules forbidding its suppliers from discussing Apple-related business with investors and the media.

Shares of GT Advanced Technologies Inc, a mineral crystal specialist, slumped 13 percent on Sept 9 after some investors were surprised the US company's scratch-resistent sapphire glass was not being used on the new iPhones.

The phones launched on Friday are Apple's first to include NFC radio chips used for the new Apple Pay mobile payment platform. The NFC chip in the iPhone 6 Plus comes from NXP Semiconductors, according to iFixit, in line with most investors' expectations.

NXP also supplies a motion co-processor, key to making the iPhone's sensors work without draining its battery, iFixit said.

As in other iPhones, Apple has designed its own main processor with technology licensed from ARM Holdings and in this device it is the A8 chip.

The iPhone 6 Plus opened by iFixit also included a NAND flash memory chip, used for storing music and photos, made by SK Hynix 000660.KS. Apple in the past has depended on multiple companies to supply its memory chips.

Raymond James analysts expects sales of iPhone 6 and larger iPhone 6 Plus to top 9 million in the first weekend.

As well as Apple's stores, AT&T Inc, Sprint Corp, T-Mobile US Inc and Verizon Wireless in the United States will start selling the phones on Friday.

source: www.abs-cbnnews.com

Smartphones seen to boost mobile commerce

MANILA -- Smartphones, which deliver a computer-in-your-pocket experience to consumers, is going to be a key catalyst of growth of mobile commerce (m-commerce), according to major processor manufacturer Qualcomm.

"The computing, graphical and connectivity performance of these devices have increased dramatically over the years, allowing developers for the first time to design applications and services," Qualcomm public relations manager for Southeast Asia and the Pacific Adrian Fu said in a recent email interview with ABS-CBNnews.com.

With its increased transmission speeds and capacity, Fu believes long-term evolution (LTE) technology will enable consumers to experience smoother and faster m-commerce services.

"Certainly, however, the performance of any LTE network is heavily dependent upon the level of infrastructure deployment, as well as the amount of contiguous spectrum an operator has," Fu said.

LTE requires at least 10 MHz of continuous spectrum in order to deliver a reasonable service.

As mobile users increasingly demand richer streaming media entertainment experiences, Fu pointed out that the modem will become a crucial element in delivering that experience.

Furthermore, Fu said modems will have a major role in the continuous development of networks by supporting all the latest communication technologies and adapting to network conditions and user needs.

In response to the growing needs of the market, Fu said Qualcomm has introduced its Gobi modems for industry connectivity solutions.

Fu noted that Qualcomm was the first to commercialize carrier aggregation in Snapdragon 800, enabling CAT5 speeds (150mbps) in fragmented 20 MHz spectrum.

"Our RF360 front-end solution enables for the first time a single, global LTE design for mobile devices, as it tackles the complexities associated with the wide range of radio frequencies used to implement 2G, 3G, and 4G LTE networks," Fu said.

"With RF360, consumers will now roam on LTE technologies in most parts of the world."

"For device vendors, this means greater cost efficiencies as they are able to reduce the number of variations of devices needed to be designed—simply to address the different frequency band requirements among different regions of the world," Fu added.

He claimed Qualcomm Snapdragon to be the leading portfolio of mobile processors, noting that Snapdragon processors are best-in-class technology designed from the ground up specifically for mobile, including custom CPUs, GPUs, modems, DSPs, navigation and system level management software.

In 2013, he reported that more than 1,000 devices were announced and/or commercially available, with many of them making their way to the Philippines.

"With our recent announcements of Snapdragon 801, 805, 610, 615 and 410 processors, Qualcomm is in an excellent position to capture more device wins in 2014," Fu said.

source: www.abs-cbnnews.com