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Qualcomm Deal With Lenovo Shows Its China Woes May Finally Be Easing

The deal follows a similar one reached with Xiaomi in December.

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After spending much of 2015 battling with Chinese regulators and companies over patent licenses, Qualcomm is hoping it has finally turned a corner.

The company is announcing today that it has signed Lenovo to a deal that will see it pay royalties on the 3G and 4G phones it ships.

Qualcomm reached resolution with Chinese antitrust authorities just over a year ago, agreeing to pay a $975 million fine. But its problems didn’t end there.

The company had to lower its earnings estimates throughout the year, in part because of the difficulties it had getting companies to make licensing payments. That’s despite having agreed to new licensing terms as part of its agreement with regulators.

One by one, though, it has started to resolve its differences with key phone players. In December, for example, it reached a deal with Xiaomi in which the Chinese phone maker will pay Qualcomm and has also come to terms with Huawei, ZTE and TCL, meaning that, with Lenovo, it now has agreements with the top five Chinese phone makers.

Thursday’s deal with Lenovo covers phones sold under that brand as well as Motorola-branded devices.

Licensing issues haven’t been the only ones hurting Qualcomm over the past year. It also has taken a hit from a maturing smartphone market in general, as well as the loss of business with Samsung, which used its homegrown chip for last year’s Galaxy S6 and Galaxy Note 5 devices instead of Qualcomm’s processor.

Qualcomm stands to see good news on that front as well, as sources have said Samsung will use Qualcomm’s Snapdragon 820 in some models of the new Galaxy S7, which is expected to debut next week in Barcelona.

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