Qualcomm Inc. said it has decided to change the way it measures royalty revenue to reflect what accrues to it from its licensees around the world. The new measure, which takes effect in the fourth quarter, will significantly reduce royalty revenues for the quarter, said the company.
Qualcomm said the decision came from the commercial launch and rapid global expansion of W-CDMA networks, market share changes among licensees and inconsistency in the licensees’ chipset inventories.
The company had announced its plan to review its method of evaluating its royalty revenues Sept. 17.
“This change will have no effect on operating cash flows in the quarter, nor will it impact the underlying economics of the company’s licensing business,” said Qualcomm.
