Mobile chip giant Qualcomm said that its net income declined 44% in the fourth quarter, as the company continues to struggle with China over licensing and declining chip sales. Revenue for the fourth quarter declined to $5.5 billion, a 19% drop from the same quarter last year. Net income was $1.1 billion, down 44% from the previous year.
Qualcomm?s mobile chip shipments declined 14% over the previous year to 203 million units.
"Our fiscal fourth quarter revenues and EPS were at the high end of our expectations, with stronger-than-expected MSM chipset shipments offsetting slower than expected progress concluding new license agreements in China," said Qualcomm CEO Steve Mollenkopf in a statement.
"We are encouraged by customer reaction to our flagship Snapdragon 820, are on track to deliver on our fiscal 2016 cost reduction targets and expect to exit fiscal 2016 on an improving financial trajectory," he aded.
Qualcomm had to undergo an antitrust investigation from the Chinese government around the chip company's licensing model for its 3G and 4G modems. Qualcomm had to pay off a nearly billion dollar fine to keep the Chinese government off its back.
In addition, Qualcomm has lost its biggest customers, Samsung. The Korean phone maker's Galaxy S6 line dropped Qualcomm Snapdragon 810 mobile chipset in favor of its own application processors. The Snapdragon 810 was plagued with rumors of overheating. The Snapdragon 820 looks like it's shaping up to do better over all. Mollenkopf reported that the Snapdragon 820 has won more than 60 design wins on Qualcomm's earnings calls.
The Snapdragon 820 will power smartphones that will appear in the second half of calendar 2016. Samsung is rumored to make them using its advanced FinFET technology. Mollenkopf just said that his company's relationship with Samsung "is getting better, not worse."
Qualcomm is also trying to put its chip in new products other than smartphones, such as Internet of Things products and drones. The company has been developing specialized chipsets based on its Snapdragon mobile chip.