Qualcomm 2014 Annual Report Download - page 24

Further, if we are unable to determine that our products are “conflict free,” we may face challenges with our customers that place us at a
competitive disadvantage, and our reputation may be harmed. Laws, regulations and standards relating to corporate governance, business
conduct, public disclosure and health care are complex and changing and may create uncertainty regarding compliance. Laws, regulations and
standards are subject to varying interpretations in many cases, and their application in practice may evolve over time. As a result, our efforts to
comply may fail, particularly if there is ambiguity as to how they should be applied in practice. New laws, regulations and standards or evolving
interpretations of legal requirements may cause us to incur higher costs as we revise current practices, policies and/or procedures and may divert
management time and attention to compliance activities.
Our research, development and other investments in new technologies, products and services may not generate operating income or
contribute to future operating results that meet our expectations.
Our industry is subject to rapid technological change, evolving industry standards and frequent new product introductions, and we must
make substantial research, development and other investments, such as acquisitions, in new products, services and technologies to compete
successfully. Technological innovations generally require significant research and development efforts before they are commercially viable. We
intend to continue to make substantial investments in developing new products, services and technologies that we believe can create stand-alone
value and/or contribute to the success of our existing businesses. However, it is possible that these initiatives will not be successful and/or will
not result in meaningful revenues or generate operating income that meets expectations. While we continue to focus our development efforts
primarily in support of 3G CDMA- and 4G OFDMA-based technologies, we innovate across a broad spectrum of opportunities to deploy new
business models and enter into new industry segments by leveraging our existing technical and business expertise and/or through acquisitions.
Our recent investment initiatives relate to, among others, networking, mobile computing, small cell technology and addressing the challenge of
meeting the increased demand for data; products for the connected home and the Internet of Everything; automotive; very high speed
connectivity; new display technologies; data centers; mobile health; wireless charging; and machine learning, including robotics.
Our research, development and other investments in new technologies, products or services may not succeed due to, among others:
improvements in alternate technologies in ways that reduce the advantages we anticipate from our investments; competitors’
products or services
being more cost effective, having more capabilities or fewer limitations or being brought to market faster than our new products and services;
and competitors having longer operating histories in industry segments that are new to us. We may also underestimate the costs of or
overestimate the future operating income and/or margins that could result from these investments; and these investments may not, or may take
many years to, generate material returns. If our new technologies, products or services are not successful, or are not successful in the time frame
we anticipate, we may incur significant costs and/or asset impairments, our business may not grow as anticipated, our revenues and/or margins
may be negatively impacted and/or our reputation may be harmed.
Claims by other companies that we infringe their intellectual property could adversely affect our business.
From time to time, companies have asserted, and may again assert, patent, copyright and other intellectual property rights against our
products or products using our technologies or other technologies used in our industry. These claims have resulted and may again result in our
involvement in litigation. We may not prevail in such litigation given, among other factors, the complex technical issues and inherent
uncertainties in intellectual property litigation. If any of our products or services were found to infringe on another company’s intellectual
property rights, we could be subject to an injunction or be required to redesign our products or services, which could be costly, or to license such
rights and/or pay damages or other compensation to such other company. If we are unable to redesign our products or services, license such
intellectual property rights used in our products or services or otherwise distribute our products through a licensed supplier, we could be
prohibited from making and selling such products or providing such services. In any potential dispute involving other companies’ patents or
other intellectual property, our chipset foundries, semiconductor assembly and test providers and customers could also become the targets of
litigation. We are contingently liable under certain product sales, services, license and other agreements to indemnify certain customers against
certain types of liability and/or damages arising from qualifying claims of patent infringement by products or services sold or provided by us.
Reimbursements under indemnification arrangements could have an adverse effect on our results of operations. Furthermore, any such litigation
could severely disrupt the supply of our products and the businesses of our chipset customers and their customers, which in turn could hurt our
relationships with them and could result in a decline in our chipset sales and/or reductions in our licensees’ sales, causing a corresponding
decline in our chipset and/or licensing revenues. Any claims, regardless of their merit, could be time consuming to address, result in costly
litigation, divert the efforts of our technical and management personnel or cause product release or shipment delays, any of which could have an
adverse effect on our operating results.
We expect that we may continue to be involved in litigation and may have to appear in front of administrative bodies (such as the United
States International Trade Commission) to defend against patent assertions against our products by companies, some of whom are attempting to
gain competitive advantage or leverage in licensing negotiations. We may not be successful in such proceedings, and if we are not, the range of
possible outcomes is very broad and may include, for example, monetary
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