NDRC says will settle Qualcomm probe; company reported to have cut chip price on Dec 1

Source:Global Times Published: 2014-12-28 22:28:23

China's National Development Reform Commission (NDRC) will soon settle its antitrust investigation of US mobile chip maker Qualcomm Inc, NDRC said on Friday.

Derek Aberle, president of the company, went to NDRC, on December 5 for his seventh visit to China's top antitrust body  with his team, and exchanged views with Xu Kunlin, head of NDRC's price supervision and anti-monopoly bureau, according to the NDRC's online statement.

Xu said the case is being processed in line with legal procedures, but did not reveal a specific date for unveiling the ruling.

According to the statement, Qualcomm said that the company will cooperate with the NDRC to reach an investigation settlement.

Moreover, Qualcomm reduced the price of its CDMA (code division multiple access) mobile chip to the same level as the UMTS (universal mobile telecommunications system) chip on December 1, Shanghai-based newspaper China Business News (CBN) reported Friday.

According to the CBN, chips that adopted the CDMA 3G network standard usually cost $5 higher than the UMTS ones.

The price cut is expected to reduce costs by more than $4 for each CDMA phone with a Qualcomm chip installed, the report said, signifying that the CDMA industry chain will benefit from the cost reduction.

Analysts attributed Qualcomm's price cut to competition from rival companies, such as US-based Marvell Technology Group, in the CDMA battleground, as well as its being accused of overcharging and abusing its market position by Chinese antitrust regulators, according to the report.

Qualcomm is the world's largest manufacturer of wireless telecommunication products, holding 40 percent of the market in China and 30 percent in the world.

Manufacturers using Qualcomm chips have been asked to pay exorbitant patent fees of up to 6 percent of a phone price, over and above the cost on the chips themselves.

The China Communications Industry Association filed a report with the NDRC at the beginning of 2014, complaining about Qualcomm's overpricing, which they claim harms China's mobile industry.

In 2009, South Korea fined Qualcomm around $252 million for abusing its market position, the harshest punishment for a single company.

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