San Francisco — As part of its $103bn bid to buy Qualcomm, Broadcom has hinted that it would make big changes to Qualcomm’s patent licensing business, a major cash-cow for the company but a source of bitter conflict with regulators and key customers, including Apple. However, Broadcom has given few details about how it would go about revising Qualcomm’s practices. Qualcomm has, so far, rejected Broadcom’s takeover offer, saying the offer under-valued the company and would face regulatory hurdles. Patent licences accounted for some $5.1bn in pre-tax profits for Qualcomm in its fiscal 2017, compared with $2.7bn in pre-tax profits for its chip business, which brings in two and a half times more revenue. Thus, Broadcom CEO Hock Tan would need to carefully pair any changes to the programme with cost-cuts elsewhere, with Qualcomm’s annual $5.5bn research and development budget seen as a prime target by analysts. If Broadcom is successful in buying Qualcomm, a source familiar with the matt...
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