Qualcomm relies on 5G, Huawei patent settlement to drive strong financial forecast

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Qualcomm has been expecting to ride a 5G smartphone growth wave for a while now, and it finally looks to be taking hold as the San Diego wireless technology giant on Wednesday issued a strong forecast for the current quarter ending in September.In addition, Qualcomm announced the unexpected settlement of a long-running patent licensing dispute over patent fees with China’s Huawei. While details of the deal are confidential, Huawei will pay Qualcomm $1.8 billion for back royalties owed for 2019 and the first six months of calendar 2020.Huawei previously paid some royalties to Qualcomm while negotiations were ongoing in a dispute dating back more than two years. China’s smartphone leader, Huawei has begun paying ongoing licensing fees again to Qualcomm under new terms.“With the signing of the Huawei agreement, we are entering a period where we have multi-year licensing agreements with every major handset (maker), said Chief Executive Steve Mollenkopf in a conference call with Wall Street analysts.
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The news sent Qualcomm shares up nearly 12 percent in extended after-hours trading.“The most important element of the Qualcomm call was the settlement of the license dispute with Huawei, which we believe adds $900 million to $1 billion annual (licensing) revenue …

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