The Chinese government and Qualcomm could be headed for a showdown over 4G patent royalties, and regulators have fired the first shot.
China's National Development and Reform Commission (NDRC) recently announced it has launched an antitrust probe into Qualcomm without revealing why the chipmaker is being investigated.
Market analysts quoted byReuters have suggested that the probe is likely related to China's upcoming 4G rollouts.
With China Mobile expected to launch TD-LTE as soon as next month, and its rivals likely to follow not long after, the issue of 4G royalties will soon come to a head.
Chinese handset makers are likely negotiating with Qualcomm over TD-LTE royalties right now, according to the report, and for the next 6-9 months Qualcomm will be the only chipmaker able to supply dual-mode 3G/TD-LTE devices for the Chinese market.
Qualcomm made almost half its revenue for the year ending in September from sales to Chinese vendors - some $12.3 billion. But given the large number of exports of Chinese-made handsets, sales for the domestic Chinese market accounted for closer to one fifth of its shipments.
The probe may also be aimed at giving a leg-up to the struggling Chinese chipset industry, the report adds.
Qualcomm has stated that it is not aware of any antitrust breach, but that it will co-operate fully with the NDRC probe.