It has come to our attention, thanks to the people over at the WSJ that Qualcomm has become the target of China?s National Development and Reform Commission and has commenced an investigation of Qualcomm relating to the Chinese Anti-Monopoly Law (AML).
Qualcomm posted a statement on their own website, stating, "Qualcomm Incorporated (NASDAQ: QCOM) today reported that China?s National Development and Reform Commission (NDRC) has commenced an investigation of Qualcomm relating to the Chinese Anti-Monopoly Law (AML). The NDRC has advised that the substance of the investigation is confidential. The Company is not aware of any charge by the NDRC that Qualcomm has violated the AML. We will continue to cooperate with the NDRC as it conducts its confidential investigation."
As you can tell, Qualcomm claims to have no knowledge of any violations of the Chinese Anti-Monopoly Law. You can read the entire document if you want to, but the truth is that when it comes to Qualcomm, it would really be difficult for anyone to claim Qualcomm is participating in a monopolistic manner. Sure, Qualcomm is considered to be one of the leaders in both SoCs and modems, but the truth is that they are by no measure a monopoly in China. If you look at China specifically, I believe that AllWinner actually ships a signifily greater volume of chips than Qualcomm and has a larger market share (according to AllWinner). Then, if you take into account companies like MediaTek and Rockchip, you can clearly see that Qualcomm has a ton of competition in China when it comes to SoCs.
Now, when it comes to modems, that may be an entirely different story. Companies like Rockchip and AllWinner don’t currently have anything serious when it comes to modems. Sure, Rockchip has a 3G modem, but the hot stuff is all 4G LTE and Qualcomm has a pretty strong IP position there. MediaTek is trying to break into the 4G LTE market, but that stuff won’t be available until next year. And there may be a reason for that, perhaps. Since I suspect that anything Qualcomm may be accused of in China will likely be related to modems and probably to 4G LTE. However, since we don’t know the details of the investigation, we can only presume, hypthesize and suspect. Although, I think it would be a stretch to claim Qualcomm is participating in monopolistic behavior if they clearly don’t really have a monopoly on modems to begin with. And I’m not quite sure if you can separate 3G and 4G technologies as separate markets to claim a monopolistic position.