There’s good news and bad news in China today for Qualcomm, the US giant that creates chipsets for smartphones, tablets, PCs and other gadgets.
First off, the good: Qualcomm has announced a new $150 million fund dedicated to startups in China. The company’s Chinese portfolio includes Xiaomi, which just unveiled its new Mi 4 smartphone this week, and Dolphin Browser, which just sold a majority 51 percent share to a Chinese games company.
Qualcomm started investing in 2000, though its VC arm didn’t enter China until 10 years ago. With its newest fund, it is looking specifically for mobile-focused startups involved with the internet, e-commerce, semi-conductors, education and health. Alongside today’s announcement, Qualcomm revealed two new investments for the first time: education platform Cambridge Wow, and health startup Boohee.
“Chinese companies receiving investments from Qualcomm can benefit from Qualcomm’s insights on mobile technologies and leverage [our] relationships throughout the industry,” said the US company in a statement.
Now for that bad news. State media in China is reporting that the country’s antitrust regulator has deemed Qualcomm to hold a monopoly, as Reuters explains.
The National Development and Reform Commission opened an investigation in February following reports that Qualcomm was raising its prices in China, and thus abusing its position in the market. In addition, a report from Securities Times suggests that the commission is also investigating whether Qualcomm undercut Chinese rivals by charging less for its patents to win new customers.
The findings of the investigation have not been announced by the commission, but a guilty verdict would be likely to bring with it significant financial penalities. China’s anti-monopoly laws can be used to fine a company as much as 10 percent of its most recent annual revenues — that could see Qualcomm hit with a fine as large as $1.2 billion.
Even without a fine, the company revealed that the ongoing investigation has hampered its business in China. Reuters reports that China accounted for nearly half of the company’s global sales last year, and issues in the country led the company to cut its outlook for the next quarter of business.
Qualcomm has not released a media statement in response to the reports. We’ve reached out to the company for comment.
Headline image via David Becker / Getty Images
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