Dividends and Qualcomm’s business practices ‘strangled’ rivals, US judge finds

Inside the smart phone which many consumers have are chips to power the phone. One of the makers of the chips is Qualcomm based in San Diego. US District Judge Lucy Koh 233 page decision believes Qualcomm illegally suppressed competition by threatening to cut off supplies and extracting excessive licensing fees.

In an article by Sayanti Chakraborty and Jan Wolfe of Reuters, the Judge believes the company has a policy of no license, no chips which was verified in many emails, which contradicted Chief Executive Steve Molenkopf’s testimony. The company said they disagree and will appeal to the next level of courts.

Meanwhile governments in China, Japan, Korea, Taiwan, the European Union and the US all disagree with Qualcomm’s position.

Qualcomm recently settled with Apple and its shares have risen as a result.

Linking to dividend paying stocks, many companies make the bulk of their money from licensing fees and that is a very good thing for investors. Licensing fees allow for cash flow to continue on a long term basis. Microsoft was once sued because of its licensing fees, it is not an unusual aspect of tech companies. There is a fine balance because there is a recognition that other companies will attempt to quickly copy the new innovations on the chip which cost money to do. One sees the same thing with pharma companies with their 21 year protection. In many ways dividend investors look for these types of stocks.

There are more questions than answers, till the next time – to raising questions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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