Qualcomm's took deep dives in 2015. Its operating margin has also dropped, to about 20%, as of October 2015.
It is not a coincidence that Qualcomm's licensing fees are also on the decline, but rather a reason why the company is losing profits and market value. Many companies from around the world that license Qualcomm's technologies have been challenging the way it calculates and collects its royalty fees. Based on licensing agreements initially put in place, Qualcomm gets a certain percentage of the selling price on any mobile phone for using its wireless technologies.
Smartphone makers including Apple and companies in China and Europe are contending in antitrust cases that any increase in the selling prices of their mobile devices is the direct result of their own innovations on a particular phone software and even hardware. Thus, there is no basis for them to share with Qualcomm the additional financial gains from increased pricing. Qualcomm has since conceded and may have to give back fees of unjustified collections and even pay fines, totaling billions. This is the kind of risk that needs to be accounted for when investing in Qualcomm stock. Future advances in mobile technologies may push back the company's old patents to less prominent positions.