Qualcomm: Broadcom settlement unlikely

US chip shop Qualcomm said on Wednesday that a settlement with rival vendor Broadcom is unlikely, because of the potential impact on the CDMA pioneer’s licensing business.

During its quarterly results announcement on Wednesday, the big Q said that it would continue to defend itself from Broadcom’s attempts to obtain an injunction precluding the sale its chips sold in handsets in the US other than on Verizon’s network.

“Although Verizon announced it has entered into a license agreement with Broadcom eliminating risk of not being able to import handsets using our chips for use in Verizon’s network, a comprehensive settlement between us and Broadcom is unlikely given Broadcom’s insistence on terms which could have a material impact on our licensing business,” the company said.

Earlier this week, Verizon Wireless ceased its attempts to overturn the recent ban on Qualcomm chips and signed a licensing agreement with Broadcom instead.

Verizon said it made the deal so it can continue to sell 3G handsets. Last month, the International Trade Commission (ITC) banned the import of new 3G phone models using chips made by the firm. The ban came into effect after Qualcomm was previously found guilty of infringing three Broadcom patents related to cellular baseband chips.

“While we are increasing our guidance for the year, ITC and litigation outcomes are uncertain and could have a material impact on our business and results of operations,” Qualcomm said.

For the quarter to the end of June, Qualcomm reported revenues of $2.33bn, up 19 per cent year on year and net income of $798m, up 24 per cent year on year.


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