Turns out Qualcomm’s Chinese buddies oppose Broadcom’s takeover bid

Qualcomm seems keen to enlist the services of its new set of Chinese allies in some of its many other fights.

A report in the FT (sub required) claims “Qualcomm has won the backing of a group of Chinese smartphone manufacturers in its fight to fend off a $130bn hostile bid from rival Broadcom.” Those vendors are: Xiaomi, Oppo and Vivo, and by staggering coincidence the three of them have just pledged their undying loyalty to Qualcomm as customers of its 5G chips.

“When we first heard of [the Broadcom bid], our biggest concern was, if it happened, would there still be era-defining communications products?” said Lin Bin, President of Xiaomi, and the FT didn’t seem to get any other quotes from smartphone vendors.

As well as the ongoing Broadcom thing Qualcomm still hasn’t had its acquisition of NXP approved, with the Chinese being the last set of regulators to make up their mind on the matter. With that in mind Qualcomm President Cristiano Amon has been buttering up the Chinese government while he’s over there, and apparently reckons all the friends it has made in China will give it brownie points with the regulators.

“The remarks by Qualcomm’s partners will certainly influence any future decision by Chinese regulators over the Broadcom bid,” said Cui Kai, an analyst at IDC, in the FT piece. “China is trying to upgrade its manufacturing. These manufacturers highly rely on Qualcomm, and that will be an important consideration for the regulators.”

Amon concluded that, since US companies like Apple are giving it such a hard time, then China suddenly looks like a more rewarding place to hang out, even going so far as to praise China as a good place to do business with intellectual property. This would appear to put Qualcomm squarely at odds with the US government and may yet end up being a case of: out of the frying pan, into the fire.

Qualcomm tries to make friends and influence people in China

Embattled chip giant Qualcomm is so keen to acquire new allies it has held a special event in China to court its smartphone vendors.

In common with the rest of the industry it’s all about 5G this year, and for the foreseeable future, for Qualcomm. We’re already all too aware how aroused telcos’ marketing departments are at the prospect of slapping 5G on everything, on the assumption that they’ll flog loads more of it as a consequence. This trend is likely to be most conspicuous among smartphone vendors.

A lot of these are Chinese, so it makes sense for Qualcomm to make a bee-line for them, especially since the only other two of note are Samsung, which has an ambivalent chip relationship with Qualcomm, and Apple, which seems to actively despise Qualcomm. The result is the ‘5G Pioneer Initiative’, which involves Oppo, Vivo, Xiaomi, Lenovo, ZTE and Wingtech. What, no Huawei?

“5G will bring massive new opportunities to the mobile industry, and we are excited to work with these manufacturers on this 5G Pioneer Initiative,” said Cristiano Amon, president of Qualcomm. “Qualcomm Technologies has close relationships within China’s mobile and semiconductor ecosystem, and we’ll continue to work with this ecosystem to drive innovation as we move from the 3G/4G era to the 5G era.” Everyone else said stuff too, but it was more of the same. Suffice it to say they’re all pleased, excited and committed.

On top of that Lenovo, Oppo, Vivo and Xiaomi all signed a memorandum of understanding (where’s the photo? How do we know it happened unless there’s a photo of loads of people in suits standing behind a desk with a bit of paper on it?) for the multi-year purchase of RF front-end solutions.

Apparently all this MoU amounts to is a statement of intent to purchase some gear from Qualcomm, but with no obligations, so you have to wonder what the point of it is. Our guess would be that this is some bullish messaging directed at investors currently being courted by Broadcom as part of its hostile takeover bid. Lots of spokespeople said things, again.