Qualcomm is facing an antitrust investigation into its aggressive sales tactics in the European market. The investigation stems from the release of a new radio frequency front-end chip, which is designed to be paired with a 5G modem chip in 5G smartphones. Qualcomm has already signed radio frequency contracts with major tech corporations like Samsung, Google, and LG, and credited the new chip for better-than-expected sales and revenue projections.
The problem, according to the European Union, is that Qualcomm may have used anti-competitive sales tactics to generate those impressive results. The EU alleges that Qualcomm pressured customers to purchase the new radio frequency chip in tandem with its own 5G modem chip, effectively boxing out competitors like Broadcom and Qorvo. Those competitors manufacture radio frequency components that could just as easily be placed next to Qualcomm’s modem chip in a 5G smartphone.
Qualcomm could face hundreds of millions of dollars in fines – up to 10 percent of its annual revenue – if the European Commission determines that there was an antitrust violation. The Commission has previously fined Qualcomm for anti-competitive practices on more than one occasion, issuing a €242 million penalty in 2019 and a whopping €997 million penalty in 2018. The latter was issued after Qualcomm paid Apple to use exclusively Qualcomm chips for the iPhone.
Despite the steep penalties, analysts believe that the antitrust investigation will have little effect on Qualcomm’s business practices, or its prospects in the radio frequency market. Qualcomm is currently in the process of responding to the Commission’s request for information, which was sent on December 3.
Since then, Qualcomm has unveiled a new ultrasonic fingerprint sensor, and placed its Vision Intelligence Platform – and its APQ8056 chip – in a new smart car platform from Raven Connected. Qualcomm and Ericsson also completed a successful test of a standalone 5G connection back in September.
Source: Reuters
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