Major Qualcomm shareholder says he opposed Broadcom bid in hopes of settlement with Apple

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in iPhone
The head of a mutual fund with 8.3 million shares in Qualcomm says he opposed Broadcom's now-aborted $117 billion takeover bid, thinking Qualcomm can do better -- so long as it settles its legal battles with Apple.




"There's no doubt I would have made a quick profit if the Broadcom deal had gone through," Parnassus Investments CEO Jerome Dodson told the New York Times. "But as a shareholder, I voted against it."

U.S. President Donald Trump recently intervened to block the bid. Dodson said he supported the Trump administration's view that Broadcom's likely cuts to research and development at Qualcomm would give Chinese firms an edge in 5G technology, in theory posing a national security risk.

On an investment level the executive argued that if Apple and Qualcomm can settle, the latter's revenues should surge and push its stock price well beyond the $79 per share Broadcom was offering, to $84 or more.

In fact Dodson reportedly met with a group of Qualcomm officials in late February, including CEO Steve Mollenkopf, using the opportunity to push for a settlement. Dodson said he argued that it wasn't worth alienating Apple as a customer, but the Qualcomm team insisted that Apple was asking for more than it was willing to give, and that on an engineering level the two companies' relationship was still good.

The officials added that a settlement would eventually be reached, returning Qualcomm's situation to normal.

Apple has called on Qualcomm to stop charging licensing fees as a percentage of a device's cost, a particularly high expense in the case of the $999-plus iPhone X. The situation means that companies like Apple are often paying more than vendors of low-cost smartphones, despite using the same cellular technology.

Qualcomm has worried that if it goes that route, it will have to offer the same terms to all of its big customers, seriously impacting revenues. Dodson said the Qualcomm officials told him they offered to amend the Apple agreement without changing its general licensing policy, but Apple turned this down.

The executive lastly suggested that amid rumors Intel might bid for Broadcom, it should buy Qualcomm instead.

"Why doesn't it bid for Qualcomm? If Intel bought it, Qualcomm would be in good hands," he remarked. "As a citizen, I'd be very comfortable with that."

Apple uses a mix of Intel and Qualcomm cellular chips in iPhones. Some rumors have suggested Apple could go Intel-only in future models, taking advantage of modem upgrades.

Comments

  • Reply 1 of 11
    rob53rob53 Posts: 2,007member
    Or Qualcomm could lose its lawsuits and be worth much less. 
    SpamSandwichk2kw
  • Reply 2 of 11
    robjnrobjn Posts: 203member
    Why would Intel buy Qualcomm?

    Qualcomm have destroyed their relationship with Apple and all those Qualcomm chip sales to Apple now look like they are going Intels way.
    watto_cobra
  • Reply 3 of 11
    Apple will continue doing business with broadcom and intel. Qualcomm shot themselves in the head thinking they could mafia style strong hold Apple and its smaller helper companies attempting to double dip and think they’d get away with it. they should continue to lose market share 
    racerhomie3jony0
  • Reply 4 of 11
    racerhomie3racerhomie3 Posts: 1,015member
    I hope Qualcomm crashes & burns.
    jony0
  • Reply 5 of 11
    Rayz2016Rayz2016 Posts: 4,556member
    How does the Qualcomm/Apple contract work?

    You walk into Tesco and buy a pint of milk.
    Three days later, you get a bill for the same pint of milk … from the cow.
    Your neighbour also gets an invoice from the same cow,
    but you were charged more than him because you have a bigger fridge. 
    watto_cobrajony0
  • Reply 6 of 11
    k2kwk2kw Posts: 1,699member
    rob53 said:
    Or Qualcomm could lose its lawsuits and be worth much less. 
    Maybe, but it seems like loses 90% of the lawsuits they are in.   Worst legal department ever.
    I expect the cash register at QualComm to be going Cha-Ching soon.

  • Reply 7 of 11
    I hope Qualcomm crashes & burns.


    Yes, because every single one of the 33,000+ employees at Qualcomm is responsible for this mess, and all of them should lose their jobs over it. /s

    It's too bad there isn't some contract arbitration system in the U.S. where these two companies could go to resolve their differences.  That way, maybe some accommodation could be reached, and a company Apple obviously thinks produces components of high enough value to include in their devices could continue to operate.

    Wait...

  • Reply 8 of 11
    foggyhillfoggyhill Posts: 4,767member
    I hope Qualcomm crashes & burns.


    Yes, because every single one of the 33,000+ employees at Qualcomm is responsible for this mess, and all of them should lose their jobs over it. /s

    It's too bad there isn't some contract arbitration system in the U.S. where these two companies could go to resolve their differences.  That way, maybe some accommodation could be reached, and a company Apple obviously thinks produces components of high enough value to include in their devices could continue to operate.

    Wait...

    Qualcomm strong armed Apple into paying double for their crap for years (Apple had no other options), this goes beyond a need for arbitration, it shows QC has a disregard for their clients. There is no coming back from that unless the whole top management is gutted.  There is a reason why QC is losing in court all over the place.



    jony0
  • Reply 9 of 11
    big8cebig8ce Posts: 7member
    LIsten, Apple is a mature company with significant bargaining power. They have several options of where they could buy their modem chips. If I were Qualcomm, I would charge as much as the customer is willing pay me for my product. It's not like Qualcomm has an inferior product; They have the best and everyone else is trying to catch-up to them. Now that Apple has indicated they are willing to use other suppliers for their products, Qualcomm with have to rethink their policy. Somebody will have to blink. Don't be surprised if it Apple.
  • Reply 10 of 11
    foggyhillfoggyhill Posts: 4,767member
    big8ce said:
    LIsten, Apple is a mature company with significant bargaining power. They have several options of where they could buy their modem chips. If I were Qualcomm, I would charge as much as the customer is willing pay me for my product. It's not like Qualcomm has an inferior product; They have the best and everyone else is trying to catch-up to them. Now that Apple has indicated they are willing to use other suppliers for their products, Qualcomm with have to rethink their policy. Somebody will have to blink. Don't be surprised if it Apple.
    Nahhh, be very suprised, QC is losing everywhere in every country and it's not just Apple that's kicking them.

    Now, Apple has a choice, 5 years ago they had none and QC was abusing FRAUND with Apple and others and knew it;

    Going forward, with Intel really upping it's game, Apple HAS a choice, and it's choice is to leave QC to die.
    jony0
  • Reply 11 of 11
    I say Apple should leave QualCom and all the drama that comes with QualCom.
    Apple can leverage many relationships with Intel including Apple ASIC manufacturing.

    QualCom will survive and be fine without Apple.
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