Qualcomm nets patent deals with China’s top two fastest-growing phone makers

Qualcomm’s busy year in China continues with news that it has agreed to patent licensing deals with two of the world’s fastest-growing smartphone companies: Oppo and Vivo.

U.S. chip firm Qualcomm was hit with a near-$1 billion fine for anti-trust violations in 2015, and since then it has gone on a licensing spree to link deals with Chinese OEMs en masse. Today, it added Vivo to the list after it announced a similar arrangement with Oppo last week.

The names may not be familiar to all, but these are two significant deals.

According to IDC, Oppo sat fourth in the mobile industry with 6.6 percent of global smartphone sales in Q2 2016 after shipping 22.6 million units. Vivo ranked fifth with 16.4 million units shipped, or 4.8 percent marketshare. Oppo grew its shipments 136 percent year-on-year, while Vivo increased its figure by 80 percent over the same period.

Together, these new deals mark more than half a dozen new agreements in China since December last year. Other recent Qualcomm licensees in the country include Hisense, Yulong and Lenovo. In total, Qualcomm claims to have deals with more than 200 Chinese companies, that number doesn’t only include OEMs.

Beyond securing deals, Qualcomm is also laying down the law with those in China who won’t comply. It filed a patent infringement claim against Meizu, another fast-growing Chinese phone company, in June after growing tired of more than a year of apparent negotiations.

Oppo and Vivo are important additions to Qualcomm’s stable. Both sell sub-$250 smartphones in China and other emerging markets. A combination of price sensitivity and a lack of brand loyalty in many of these regions helped Oppo and Vivo first break into the world’s top five smartphone makers in April of this year.

Their successes aren’t limited to overseas countries — the two companies are challenging Apple, Samsung and other top phone players for sales on home soil in China, too.

Qualcomm’s resurgent business in China was a key reason it beat analyst expectations with its Q2 2016 financials. The firm posted net income of $1.44 billion, which was up 22 percent on the previous year. More than half of its $6 billion quarterly revenue came from China.