Bank of America Sees QUALCOMM as Determined to Lower Royalties

In a report published Thursday, Bank of America analyst Tal Liani reiterated a Neutral rating and $85.00 price target on

. In the report, Bank of America noted, “This week we met with carriers, equipment vendors and regulators in Beijing, discussing the Chinese 4G market, demand for smartphones, and the sensitive issue of royalty disputes with Qualcomm. In short, the Chinese cellular market is booming, licenses are awarded, carriers are committed to 4G deployments, and 2014/2015 are expected to be the golden years for base station deployments and customer migration. However, we note that China's regulator and the local vendors are also reluctant to pay Qualcomm its standard royalty fee and see it as an inhibitor to growth. All participants commented on the anti-monopoly investigation, leading us to believe that royalty discounts are not a question of if, but only a question of when and how much. We reiterate our Neutral rating and highlight our key takeaways.” QUALCOMM closed on Wednesday at $77.20.