US chipmaker Qualcomm will pay $975m (£640m) to Chinese
authorities to end a 14 month anti-trust investigation into its patent
licensing practices.
The fine is the largest in China's corporate history and
will require the firm to lower royalty rates on patents used in China's mobile
phone market.
The move could help Chinese smartphone makers Xiaomi and
Huawei.
Qualcomm said on Monday it would not contest the ruling that
it violated China's anti-monopoly law.
"Although Qualcomm is disappointed with the results of
the investigation, it is pleased that the NDRC (National Development and Reform
Commission) has reviewed and approved the company's rectification plan,"
the tech giant said in a statement on Monday.
Stake
in China
The firm, which is the biggest supplier of chips used in
smartphones, will now charge royalties based on 65% of the selling price of
phones in China, instead of on the entire price.
China's expanding high-speed 4G network is driving demand in
the world's largest smartphone market, where Qualcomm as a key player.
The chip giant made about half its global revenue of $26.5bn
in China in its last fiscal year.
News of the agreement sent the company's New York listed
shares up 2.8% in after-hours trading.
The firm also increased its profit and revenue forecast for
the current fiscal year.
Chief executive Steve Mollenkopf said he was pleased the
resolution had removed "uncertainty" surroundings its business in
China.
"We will now focus our full attention and resources on supporting
our customers and partners in China and pursuing the many opportunities
ahead," he said.
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