U.S.-based chip maker Qualcomm Inc signed a licensing pact with Xiaomi Technology Co that allows the Chinese smartphone producer to use its patents to make and sell third- and fourth-generation devices.
Xiaomi has enjoyed a rapid rise with handsets it touts as cheaper but well-designed alternatives to Apple Inc's iPhones.
Under the agreement, the royalties payable by Xiaomi are consistent with terms of a rectification plan submitted by Qualcomm to China's National Reform and Development Commission (NDRC).
Qualcomm entered a settlement with the NDRC over the company's violation of China's Anti-Monopoly Law.
The company said in February that it would pay 6.09 billion yuan ($951.9 million) and modify its business practices in China to end an official antitrust investigation. The fine is equivalent to 8 percent of Qualcomm's 2013 sales in China, marking a record in the country's antitrust history.
An antitrust probe into Qualcomm officially started in November 2013 as industry players complained the company was abusing its dominant position in the local market, according to the NDRC.
In November, Qualcomm forecast that its profit for the first quarter of fiscal 2016 would be way below analysts' expectations as the chip maker was facing delays in closing new licensing agreements in China and some Chinese customers were "improperly withholding" royalties on Qualcomm's patents by changing the way they reported sales.
Qualcomm's agreements with two major Chinese customers are taking longer than anticipated, Chief Executive Steve Mollenkopf said on a conference call in November.
The chip maker, which got half of its fiscal 2014 revenue from customers in the Chinese mainland, also said in November that it expected the issue to be resolved once the new agreements were completed.
