Qualcomm Inc., which has struggled to get paid licensing revenue in China, said it signed up phonemaker Vivo Communication Technology Co., helping cement its position in the world’s largest phone market.
Vivo, the third-biggest smartphone maker in China, agreed to pay Qualcomm for technology used in 3G and 4G phones, the U.S. chipmaker said. The deal with Vivo comes a week after Qualcomm secured a similar agreement with GuangDong OPPO Mobile Telecommunications Corp. The two companies account for about 30 percent of phones shipped by the top ten Chinese phonemakers.
Success in China is crucial to Chief Executive Officer Steve Mollenkopf’s push to reignite growth at Qualcomm, which gets the majority of its profit from selling the rights to use technology that underpins modern phone systems. Reluctance by Chinese phone makers to pay it during and after an antitrust investigation there contributed to four consecutive quarters of revenue declines at the San Diego-based company.
In its most recent earnings report, Qualcomm reported a return to sales growth and higher profit than analysts had projected. Increasing payments from Chinese licensing hold-outs contributed to that boost, as did more chip orders from handset makers there who are gaining market share from overseas competitors such as Apple Inc.
Qualcomm is pitching its technology to Chinese companies to help its position in that country and, it says, help them when they try to expand overseas.