Qualcomm has over 24,000 active patents in progress and already owns 140,000 global patents, which form the core competitiveness of the company. They operate by integrating their patent and chip businesses, and just by purchasing Snapdragon chips, they have to agree to license the corresponding patents. This is a strategy that is different from other companies, and secures two sources of revenue at the same time.
Profits are sweet only with patents
Patent Licensing Business Performance: In 2023, Qualcomm Technology Licensing (QTL) segment recorded revenue of $5.3 billion and profit of $3.6 billion, achieving a high margin of 68%. This figure is almost half of Qualcomm’s total net income.
Achievement in a competitive industry: Qualcomm achieved an average profit margin of over 29%, significantly exceeding the industry average of 22.74%. This is a remarkable achievement in the highly competitive semiconductor industry.
Apple Dispute: Qualcomm has a strategy of aggressively suing for patent infringement, as evidenced by its two-year legal battle with Apple. This strategy further solidifies their strong position in the market.
Technological Advantage and Legal Response: Qualcomm's strategy suggests that sufficient technological advantage and legal response preparation are essential. Their technological lead is at a level that competitors cannot easily catch up with.
Does Nvidia come to mind?
Qualcomm's case shows how technological superiority and innovative patent strategies can significantly improve a company's profitability and market position. Qualcomm, which has a unique position in mobile chipsets represented by Snapdragon and recently in wireless communication technology (LTE, 5G), and Nvidia, which is capable of high-performance processing, are places where they have established themselves by successfully linking technological superiority to patents, although they are in different fields.
Division
NVIDIA
Qualcomm
Main Business Areas
Graphics Processing Units (GPUs), Artificial Intelligence (AI), Data Centers
Mobile chipsets, wireless communication technologies (especially 5G), IoT (Internet of Things)
Characteristic
- Strength in developing high-performance graphics cards
- Provides GPUs for gaming, professional graphic design, data centers, AI and machine learning
- Also used in cutting-edge technologies such as autonomous vehicles
- Strength in manufacturing chipsets for mobile devices
- Development of processors and modems used in smartphones, tablets, and wearable devices
- Strength in wireless communication technology and patents, leading 5G technology
Innovative patent strategy
- Acquiring new patents in virtual reality, AI, and machine learning along with GPU technology innovation
- Obtaining patents for autonomous vehicles and robotics technology
- Extensive patent portfolio covering 3G, 4G and 5G wireless communication technologies
- Possesses fundamental technology patents for chipsets used in mobile terminals
- Acquired patents related to chipsets applied to IoT and home appliances
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