What Does Qualcomm’s Latest Licensing Deal With EWPE Imply?
Leading chipset maker, Qualcomm has recently entered into a patent licensing agreement with Chinese OEM – Zhuhai Ewpe Information Technology Inc.(EWPE). ((Qualcomm Signs 3G/4G Chinese Patent License Agreement with EWPE, Qualcomm Press Release, April 2016)) EWPE is a subsidiary of Gree Electrical Appliances Inc, a manufacturer of home electrical appliances. Gree, being a manufacturer of home electrical appliances, is expanding its reach to smart connected appliances that require wireless modems and radios for internet connectivity. Since Qualcomm holds a large number of standard essential patents in 3G and 4G LTE technologies, which are required for connectivity, Gree will have to pay royalties to Qualcomm for using these technologies in its devices. Given below is an analysis to estimate the implication of this deal for Qualcomm:
Although the revised price estimate did not change significantly, there can be further upside to our revised price estimate as Gree also plans to launch mobile phones to specifically control smart appliances, which can further boost Qualcomm’s licensing revenues. According to reports, Gree was expected to make its debut in the mobile phone market soon. However, it is difficult for us to estimate the exact impact of Gree’s future mobile phone sales on Qualcomm’s stock price at this point of time.
Notes:
- With Smartphone Market Recovering, What To Expect From Qualcomm’s Q2 Results?
- Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of $189?
- Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of $190?
- With Expectations Low For Q4, Will Qualcomm Spring A Surprise?
- Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of Over $180?
- Will Qualcomm Stock Recover To Highs Seen Prior To Inflation Shock?