NEW YORK (TheStreet) -- Qualcomm (QCOM) - Get Report stock is increasing by 0.31% to $49.23 in mid-morning trading on Friday, after the wireless technology company signed a patent license agreement with Lenovo Group (LNVGY) in China. Terms of the deal were not disclosed.
Under the agreement, which covers devices under the Motorola and Lenovo brands, Lenovo will pay royalties to access Qualcomm's patents to develop, manufacture and sell 3G and 4G devices.
"Lenovo is pleased to have concluded another license agreement with Qualcomm, which improves our IP position in China," Lenovo general counsel Scott Offer said in a statement. "This agreement also provides a solid foundation for Qualcomm and Lenovo to expand and strengthen the long-term relationship between our companies, both in China and around the world."
Earlier this week, Qualcomm announced three original device manufacturers will be using the Snapdragon Wear 2100 System-on-Chip platform, which provides wearable producers with processors, software, support, tools and reference designs. (Qualcomm is held in the Dividend Stock Advisor portfolio. See all of its holding here.)
Insight from TheStreet Ratings Team
David Katz mentioned Qualcomm's latest announcements in a post on Real Money Pro. Here's what he had to say about the company:
At current prices and in light of QCOM making meaningful strides in streamlining its business, fixing its royalty issues in China, regaining product placements with key customers and paying an outsize and growing dividend, we believe the stock has reached an inflection point and we expect business results to follow that trend in short order.
Last week, Qualcomm held an analyst day that laid out a solid plan to restart growth beginning in 2016, with traction really taking hold in 2017.
The biggest point of confidence was management's belief that royalty rates have stabilized and will start to get better from here. In particular, the Chinese issues are getting resolved as most of the manufacturers have signed new agreements. However, the company also will benefit from the next leg of global 3G/4G growth because it will occur in the international markets such as India and other parts of Asia, the Middle East and Africa that will pay higher royalty rates.
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