Qualcomm’s Lucrative Licensing Model Jeopardized by FTC Scrutiny

By Ian King and Alex Webb, Bloomberg News

Qualcomm Inc. built itself into the world’s biggest and most profitable smartphone chipmaker by using a simple formula: selling billions of dollars worth of semiconductors while raking in fat profits from licensing fees tied to the underlying technology.

That lucrative model is under siege on a growing number of fronts -- most recently this week when the U.S. Federal Trade Commission accused Qualcomm of using its dual businesses to thwart competition in the $100 billion market for phone chips.

The regulator alleged that Qualcomm forced partner Apple Inc. to use its chips exclusively ...