Qualcomm (QCOM, Tech30) -- a maker of smartphone hardware -- said Wednesday that it will cut 15% of its jobs.
The layoffs add up to about 5,000 workers. News of the job cuts came as the company also reported its revenues fell 14% and that its profit was down 47% from a year ago. Shares slumped 1.2% in after hours trading and are down more than 21% over the past year.
Its business has struggled since Samsung began making chips for its Galaxy S6 in house.
"They didn't excute it. They didn't have the right product at the right time," Srini Pajjuri, an analyst with CLSA, said.
He said the market for Qualcomm's products has shrunk as Apple and Samsung -- which represent more than 50% of the market -- have started making their own versions. To adjust, Pajjuri said, they have to downsize.
Qualcomm said it plans to cut spending by $1.4 billion within the next year and change executive compensation "to align with stockholder returns," the company said in a statement.
JANA Partners, an investment firm that bought a large stake in the company earlier this year, is also putting two of its members on Qualcomm's board.
Qualcomm would not comment on when the cuts would take place or what jobs would be eliminated.
For all the naysayers, I ask why is PRKR able to continue to attract multimillion dollar investments from sophisticated new and existing players if they don't have a good bit of "meat on the bone"? No one would bet on a cause they thought lost, only on one they see as, more likely than not, playing out much to their favor. Shorts can attack all they want but "inside the game" ( i.e. informed) longs seem convinced PRKR has something people will ultimately want.. No guarantees but hard to ignore this fact. Maybe 2015 will be the year :).
Qualcomm stock down between regular trading today and after-hours almost 10%. Samsung moving on without them. Other chip players and options filling void created by QCOM chip problems. Sounds like PRKR may have some new potential customers to seek out.
Excerpts from Reuters article:
Top smartphone maker Samsung Electronics Co Ltd decided not to use the new Qualcomm Snapdragon 810 processor for its next flagship Galaxy S smartphone after the chip overheated during testing, Bloomberg reported earlier this month. Samsung had declined to comment on the report.
"Qualcomm has a lot of market share but they have some customers with scale to do their own silicon, and it looks like that's happening," said Bernstein analyst Stacy Rasgon. "This may be a trend."
Qualcomm said "product challenges" with a chip in China have created an opening for smaller competitors.
"We have already addressed many of the initial product challenges in order to support early customer device launches in these tiers and are continuing to further enhance the performance of this chip," Mollenkopf said.
ACKSONVILLE, Fla., Dec. 23, 2014 (GLOBE NEWSWIRE) -- ParkerVision, Inc. (PRKR), a developer, manufacturer and marketer of semiconductor technology solutions for wireless applications, announced today that it has entered into a Funding Agreement with 1624 PV, LLC, a litigation investment firm, (the "Funder") for the funding of up to $7 million in legal fees and expenses for future patent infringement litigation to be brought by ParkerVision (the "Company"). Under the terms of the agreement, the Company will reimburse and compensate the Funder from gross proceeds resulting from the funded legal actions up to a maximum amount (the "Cap"), which is determined as a multiple of the funds disbursed by the Funder. The Funder may also receive a portion of gross proceeds from the Company's other patent litigation and patent-related monetization activities, subject to the Cap. The Funder has no security interest in any assets of the Company.
Funder has also entered into a Warrant Subscription Agreement ("Warrant Agreement") for the right to purchase up to 5,652,174 shares of the Company's common stock. The purchase price of the warrants is $1.3 million and will be paid to the Company in cash upon closing, which will be no later than January 15, 2015. Under the Warrant Agreement, the Company will issue, upon closing, three warrants, each exercisable for up to 1,884,058 shares at an exercise price of $1.50, $2.50 and $3.50 per share, respectively. The warrants are exercisable for a period of up to three years from the date of issuance.
QCOM trading down almost 10% today on earnings and sales miss. Could this make a company desperate to play dirty at times? Have to keep Wall Street happy.
Yahoo showed this posted successfully earlier but now I don't see it so reposting this continuation of the article I started earlier on this topic for full context:
[continued from earlier post]
The products involved include several major devices from Samsung -- the largest smartphone maker in the world -- including the Galaxy Note Edge and Note 4 smartphones, which Samsung unveiled Wednesday, as well as the company's flagship Galaxy S5 and Galaxy S4 phones. The Note 3 was also mentioned, as were several Samsung tablet computers, including the Galaxy Tab S,Tab 2 and Note Pro.
Since the litigation involves hundreds of millions of Samsung devices, potential damages from a successful suit could be huge for Nvidia. "The volume here alone makes the potential very significant," Shannon told CNET last month.
Nvidia's suit is only the latest in a series of lawsuits in the hot mobile sector. Samsung has been battling Apple for the past several years over technology used in its smartphones and tablets. The two companies in August agreed to settle all disputes outside the US, but their lawsuits continue in the country. Microsoft also has sued Samsung, saying it didn't live up to its patent licensing agreement for technology used in Android tablets and smartphones.
Companies have tended to file lawsuits with the ITC to speed up the process. Civil suits could take years to go to trial, and they're often held up for even longer in the appeals process. And even when they end, the money involved often isn't enough to deal a real blow to the company found at fault. An ITC sales ban, however, could severely hurt a company's profits. Nvidia last month estimated that an an ITC trial wouldn't happen until mid-2015 and a US district trial wouldn't come for another two to three years.
Interesting quote from posted CNET article below. Any reason PRKR couldn't follow same strategy as a work-around or back-up to current civil suits?
"Companies have tended to file lawsuits with the ITC to speed up the process. Civil suits could take years to go to trial, and they're often held up for even longer in the appeals process. And even when they end, the money involved often isn't enough to deal a real blow to the company found at fault. An ITC sales ban, however, could severely hurt a company's profits. Nvidia last month estimated that an an ITC trial wouldn't happen until mid-2015 and a US district trial wouldn't come for another two to three years."
Update from CNET on PRKR targets:
The US International Trade Commission on Monday voted to investigate Nvidia's patent complaints against Samsung and chipmaker Qualcomm.
The group will determine whether certain Samsung devices -- including the Galaxy Note Edge, Galaxy Note 4 and Galaxy S5 -- should be banned from sale in the US because the chips powering the products infringe graphics patents owned by Nvidia.
"We are pleased with the ITC decision today to open an investigation and look forward to presenting our case on how Nvidia GPU patents are being used without a license," David Shannon, Nvidia executive vice president and chief administrative officer, said in a statement.
Samsung did not immediately respond to a request for comment. Qualcomm didn't immediately have a comment.
Nvidia, which is best known for making graphics chips for PCs, last month filed lawsuits involving seven of its patents with the ITC and US District Court in Delaware. At the time, the Santa Clara, Calif., said it asked the ITC to block shipments of several Samsung smartphones and tablets to the US and requested the district court award damages for the alleged infringement.
At question is whether chips made by Samsung and Qualcomm infringe Nvidia's patents related to graphics. Samsung has tended to use Qualcomm's processors in its high-end devices. The Note 4, for instance, uses a Snapdragon 805 chip. Samsung also uses its own Exynos chips in some models, particularly those sold in Korea. The devices mentioned in the suit involve Qualcomm's Adreno graphics, ARM Holdings' Mali technology and Imagination's PowerVR graphics architecture, which are three of Nvidia's main competitors in mobile graphics.
From Zacks Equity Research, the many anti-competitive allegations of QCOM. PRKR may be just another potential victim and hopefully time will bear that out in a court of law ---
"Qualcomm, globally the largest mobile chip manufacturer, is facing one after one allegation for abusing its market dominance which resulting in monopolistic practice.
Recently, Reuters reported that the mobile baseband semiconductor behemoth is likely to face a European Union (EU) regulatory investigation linked to a four-year old complaint. Qualcomm currently carries a Zacks Rank #3 (Hold).
In Jun 2010, British mobile chip developer Icera accused Qualcomm of using patent-related incentives and exclusionary pricing of chipsets for capturing Icera’s business by unfair means.
In the meantime, Icera was acquired by NVIDIA Corp., a close competitor of Qualcomm in 2011. Reuters also reported though unconfirmed, Qualcomm may face a fine to the tune up to $2.5 billion if found guilty.
The EU competition authority at times takes several years to open an investigation. In Jun 2014, Intel Corp., the global leader in the overall semiconductor market, was fined a substantial $1.45 billion for abusing its dominant market position.
Earlier in 2010, Qualcomm enjoyed a major reprieve by the EU regulator as Texas Instruments Inc. and Ericsson A.B. withdrew their litigations against the company.
Meanwhile, Qualcomm is currently in deep trouble in China. In Nov 2013, the Chinese regulatory authority, National Development and Reform Commission (NDRC), initiated a probe on the company related to its monopolistic practice.
A state-run Chinese newspaper stated that the NDRC has determined that Qualcomm is exercising monopolistic power in the country and may need to pay $1.2 billion or more in fine. More importantly, the company might also have to forego royalties of TDD-LTE as a settlement. Such unfavorable actions will severely impair Qualcomm’s patent portfolio..... (continued in next post)
Tampa, as always, thanks for the insights and keeping the conversation relevant and rational. Shorts definitely seem to behave immaturely. I guess that behavior goes hand-in-hand with playing to peoples' emotions, not their reasoned thinking.
Imagine a "world renowned leader" suing the same companies for the same things as PRKR and you think I have 1/99th of a brain to think this adds luster to PRKR's point of view. LOL. I guess that makes your brain 1/99999999th, that is if you have one at all. :) Name calling here will not go far in persuading others to your point of view, by the way. But, if you like rolling in the mud, I'm game.
That's funny coming from one who claims he is himself an "imposter"! Too bad you can't bat a better average at calling out others as you do yourself.
(continued from first post)....
Nvidia did not say it is suing Imagination or ARM but it did say it is asking the U.S. International Trade Commission to prevent shipments of Samsung devices containing ARM's Mali or Imagination's PowerVR graphics architectures, as well as Qualcomm's graphics technology.
Graphics technology from Imagination is also used in Apple Inc's iPhones. Asked whether Nvidia plans to sue Apple since it uses Imagination's technology, Huang declined to comment.
"Today we’re focused on Samsung and Qualcomm, and we continue to have productive conversations with a lot of other companies out there,” he said.
Nvidia made its name developing leading graphics technology for high-end personal computers but has struggled to expand into smartphones, a market dominated by Qualcomm.
Nvidia discussed its patents with heavyweight handset maker Samsung for "a couple" of years before deciding to take legal action, Huang said.
Last year, Nvidia announced that it planned to license its graphics technology to other companies. But it has not announced any licensing deals since then.
Nvidia said its lawsuits were filed at the U.S. District Court for the District of Delaware and at the U.S. International Trade Commission in Washington.
Such dual filings are typical of infringement lawsuits since the district courts can award financial damages and the Commission cannot. At the same time, the Commission can more easily ban infringing products from the U.S. market.
Samsung and ARM declined to comment. Qualcomm did not respond to a request for comment.
I see a pattern developing here :)! PRKR may not be "imagining" things with these guys...
(Reuters) - Nvidia Corp has sued rival chipmakers Qualcomm and Samsung Electronics, accusing both companies of infringing its patents on graphics processing technology.
The U.S. chipmaker vies with Qualcomm in the business of providing chips for smartphones and tablets. It said on Thursday that Qualcomm and Samsung had used Nvidia's patented technologies without a license in Samsung's mobile devices, including the just-launched Galaxy Note 4 and Galaxy Note Edge.
Nvidia said Samsung devices made with graphics technology from Qualcomm, Britain's ARM Holdings and Imagination Technologies infringed on its patents.
"They're using our technology for free in their devices today and they're shipping an enormous number of devices," Nvidia Chief Executive Jen-Hsun Huang said on a conference call....
Tampa, thanks for the shout out :). I read your posts regularly and appreciate the info and insight you bring to the board, like a rudder on a ship, keeping it straight as an arrow. Strarkwell, I don't think, at this point, PRKR has anything to lose. It is has probably concluded that OEM's representing substantially all of its mobile market (& maybe more) have already illicitly used their IP and the scraps left behind are minor compared to what has already been taken. Also, prevailing in these suits will likely give PRKR some street credibility that appears to have been lacking up to now thanks to the unwarranted bashing and negative campaigning by shorts and competitors. I say follow the money and you won't find more of it than in the coffers of these companies (and maybe a few more to come?).
Starkwell, they probably served them advance notice and didn't get anywhere. How would PRKR sell Samsung or anyone else if they tolerate these "customers" stealing the technology and paying nothing for it? I don't see where PRKR has anything to lose. If they win, they will have "customers" who finally pay their just due. It's a shame little companies have to resort to law suits sometimes to avoid getting run over by the big companies, but that's what our legal system is all about - fairness and equality for all. Let's see what happens next. By the way, Samsung and Apple have regularly sued each other yet maintain lots of ongoing business with each other. I think Samsung will look at this more as a "cost of doing business" than as a personal affront.
"The amended complaint, filed today in the United States District Court for the Middle District of Florida, names Samsung Electronics Co. Ltd., Samsung Electronics America, Inc. and Samsung Telecommunications America, LLC (collectively "Samsung") as additional defendants and furthermore adds four patents to the seven patents in the original complaint.
The four additional patents relate to frequency translations and methods and systems for down-converting an electromagnetic signal. The original seven patents in this case relate to radio frequency up-conversion of electromagnetic signals, systems for control of multi-mode, multi-band communications, baseband innovations including control and system calibration, and wireless protocol conversion."
Just announced: PRKR adds to suit. Taking on lots of big boys. If proven, should mean lots of $$$ too :).
Tampa, please refresh... weren't there QCOM emails that were damaging to their case that were not allowed into evidence? If so, do you think they could be admitted in a retrial and strengthen the case for infringement?
Seems to me if there was any concern by PRKR over the points in this article, that they would not still be holding out for a satisfactory settlement with QCOM but would have caved by now. And, why would the judge push the litigating parties to negotiate a settlement if he plans to render such pointless with a finding to fully nullify the jury's ruling for PRKR. Further, it seems that by filing the second suit, PRKR sees themselves confidently leveraging the first suit and its conclusions, not shying away from it. I don't pretend to be a lawyer or RF engineer, just using some common sense. I guess we will know in a few more days what the judge is really thinking. My bet, until then, remains on McKool and PRKR.