Qualcomm Inc.(NASDAQ:QCOM) is picking up more patent licensing deals in China, a sign of progress in protecting a business that provides more than half of the chip maker’s profits. On Tuesday, Qualcomm ended up at $50.88 rising by 2.62%.
The company said Tuesday that two Chinese smartphone makers, Beijing Tianyu Communication Equipment Co. and Haier Group, agreed to pay royalties under patent licenses that allow them to manufacture mobile devices using 3G and 4G wireless technologies. Haier is a top global brand of consumer appliances. Founded in 1984, it has over 70K employees and generates over 136B yuan in annual sales.
Qualcomm’s announcement comes one day after it announced a similar deal with QiKu Internet Network Scientific (Shenzhen) Co., a joint-venture of Qihoo 360 Technology Co. Ltd. and Coolpad Group Ltd. that sells smartphones and other products.
Financial terms weren’t disclosed. But Qualcomm said the three deals were consistent with the licensing terms set under a settlement in February with China’s antitrust agency.
Qualcomm, based in San Diego, gets most of its revenue from selling chips that handle wireless communications and calculating chores in smartphones. But a bigger share of profits comes from licensing patents on wireless inventions.
The company’s licensing practices have prompted a series of government investigations, including probes by the U.S. Federal Trade Commission and agencies in South Korea and Taiwan. European authorities are investigating issues related to chip sales.
The company has said it is cooperating with the investigations and believes it is acting legally.
The China settlement, which followed an investigation that stretched for 18 months, had been expected to trigger a stream of licensing agreements with Chinese handset makers. But Qualcomm in early November cited continuing delays in reaching licensing deals in China when it reported a 44% drop in profit in the fiscal fourth quarter and issued disappointing earnings guidance for the year.
Those disclosures sent Qualcomm’s shares down 15% in a single trading session. The stock remains off more than 30% for 2015, despite a 3% rise Tuesday and subsequent signs of progress in China.