Watch out, Qualcomm
Korean electronics conglomerate Samsung and a whole slew of Japanese firms are looking to form a joint venture to develop baseband chips for smartphones, an area currently dominated by Qualcomm. The group includes Fujitsu, NEC, and Panasonic, while NTT DoCoMo would take a majority stake in the venture.
Baseband chips are crucial to smartphones since they facilitate signal transmission to network towers. Qualcomm's baseband chips have won spots in big-name smartphones like Apple's
Samsung and other chip companies have been trying to wean themselves off of Qualcomm's expensive royalty payments for quite some time. Sammy took the initiative years ago, foreseeing the eventual shift from 3G to 4G and working on its own chips so as not to rely on Qualcomm, which owns a substantial portion of intellectual property related to 3G (but not as much surrounding 4G technologies like WiMAX and LTE).
For now, Qualcomm is still delivering strong results despite this threat. Total revenue rose 34% last quarter with licensing and royalty fees jumping almost 42%. Winning a place in the iPhone lineup that was previously inhabited by Infineon, whose wireless unit was bought by Intel
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