Qualcomm Has Sealed Licensing Deals With Smartphone Underdogs Oppo & Vivo

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Qualcomm has sealed a licensing deal with China’s third biggest smartphone vendor, Vivo, as the chip giant smoothes over a rough few years in the Chinese market with steady gains.

Vivo is licensed to use Qualcomm’s technology in their 3G and 4G phones, the chipmaker said on Monday.

It comes just a week after Qualcomm sealed a similar deal with OPPO, which is also owned by Vivo’s parent company BKK Electronics.

The two brands have accelerated through China’s smartphone rankings in 2016, entering the top five local smartphone vendors and surpassing cult favorite Xiaomi. Along with OnePlus, which is also marketed by BKK Electronics, they now make up over 30 percent of phones shipped to the Chinese market.

According to research firm IDC, Vivo and Oppo’s market share grew 124 percent and 153 percent respectively in the year ending in March 2016, while Apple and Samsung’s share dropped in the same period.

IDC_OPPO_VIVO

Both vendors have a strong presence outside of China’s largest cities, which gives them leverage against premium vendors who market to China’s rapidly saturating first-tier markets.

The deal also marks a new milestone of progress for Qualcomm, which is steadily regaining momentum in the Chinese market following years of uncertainty. The U.S. chipmaker surprised analysts with an unexpected bump revenue bump in last month’s earnings, driven by Chinese chip demand.

Qualcomm makes over half of their total revenue from their chip licensing business, though they have struggled to ink deals with China’s largest smartphone vendors in the past. The company was subject to a year-long anti-trust investigation which ended in Qualcomm forking out a $975 million USD fine in early 2015.

They also payed out a $7.5 million USD fine in March this year after an investigation by the U.S. securities and exchange commission released a report that accused the company of bribing Chinese officials with gifts and employment offers.

With their regulatory issues settled and renewed progress on Chinese licensing deals, the company is hoping for a much brighter future in the world’s largest smartphone market.

During last month’s earnings call Qualcomm CEO Steve Mollenkopf said they were optimistic about further deals, and were in active discussion with remaining OEMS.