Qualcomm has inked a deal with China’s Haier Group China’s and Beijing Tianyu Communication that will allow the two Chinese smartphone makers to manufacture mobile devices using 3G and 4G wireless.
Under the terms of the agreement, Qualcomm has granted Tianyu a royalty-bearing patent license to manufacture and sell 3G WCDMA and CDMA2000 (including EV-DO), and 4G LTE (including “3-mode” GSM, TD-SCDMA and LTE-TDD) subscriber units for use in China.
“Qualcomm is pleased to support the growth of Chinese companies such as Tianyu as part of our long-term collaboration with China’s mobile industry,” said Eric Reifschneider, senior vice president and general manager of Qualcomm Technology Licensing for Qualcomm Incorporated.
“This new agreement enables Tianyu to develop, manufacture and sell 3G and 4G devices, greatly enhancing their competitive position in the wireless landscape.”
Madam Rong Xiuli, CEO of Tianyu welcomed the agreement as a way to expand her company’s offerings
“Tianyu recognizes Qualcomm as a global technology leader and innovator, and respects the value of the license we have obtained to Qualcomm’s Chinese wireless IPRs,” she said.
“We are pleased to sign this license agreement because it provides us with the opportunity to improve and expand our product offerings in China and certain overseas markets, empowering our users with greater access to advanced wireless services and information.”
San Diego-based Qualcomm earns the bulk of its revenue selling chips for wireless communications, while a larger share of profits is garnered through the licensing of its patents on wireless innovations.
These licensing practices have been the focus government investigations, including probes by the U.S. Federal Trade Commission and agencies in both Taiwan and in South Korea. European authorities are investigating issues related to chip sales.
The company has said it is cooperating with the investigations and believes it is acting within its legal rights.
Following an 18-month investigation and then settlement concerning its dealings in China, it was expected that licensing deals with Chinese handset makers such as this one with Hair and Tianyu would increase.
Though terms of the agreement were not released Qualcomm said royalties are consistent with the rectification plan submitted by the company to China’s National Development and Reform Commission.
