★ Qualcomm Announces Apple is Withholding Payments, Reduces Guidance (Apr 28, 2017)
In commenting on Qualcomm’s recent earnings report, I mentioned that if Apple and its suppliers continued to hold back royalty payments as part of their dispute, Qualcomm would be affected more severely in future quarters than in Q1, and that has now proven to be the case. In Qualcomm’s original guidance for this quarter, it had said that its guidance range didn’t include a scenario where it received no payments at all from these companies, but it now appears that’s the scenario that’s playing out. Apple has said it won’t make any payments until the dispute is resolved and new royalty rates set, which is a great way to put pressure on Qualcomm to either settle quickly or at least move the court case along swiftly, but means Qualcomm will be severely impacted in the meantime. It’ll be very interesting to hear Apple’s commentary on all this on its earnings call next Tuesday because it will have to set aside at least some of the amounts due as a contingency, and I’m curious to see how that affects its reported costs and margins.
via WSJ
The company, topic, and narrative tags below will take you to other posts with the same tags. The narrative link(s) will also take you to the narrative essay which provides additional context behind the post.
Vote for or share this post
Use the Like button below to vote for this post as one of the most important of the week. The posts voted most important are more likely to be included in the News Roundup podcast episode I do each week. Or use the sharing buttons to share a link to this post to social networks or other services.