Qualcomm’s headquarters in Sorrento Valley. Photo via Reuters

Qualcomm on Wednesday reported a steep decline in fourth fiscal quarter net income amid its a continuing battle with Apple over royalty payments.

The San Diego-based wireless giant reported income of $168 million, or 11 cents per share, in the fiscal quarter ended Sept. 24, compared to $1.6 billion, or $1.07 per share, in the same period last year. Revenue declined to $5.9 billion from $6.2 billion.

Apple and its contract manufacturers underpaid royalties on Qualcomm’s world-standard CDMA technology in the second quarter and did not pay royalties in the third and fourth quarters.

“We expect these licensees will continue to take such actions in the future until the respective disputes are resolved,” Qualcomm said.

Revenues from licensing dropped from $1.9 billion in the fourth quarter last year to $1.2 billion this year. Income from sales of semiconductor chips and services rose, however.

“Our fourth quarter and fiscal 2017 results reflect continued product leadership and profitability improvement in our semiconductor business, including strength in adjacent opportunities outside mobile,”said CEO Steve Mollenkopf. “We are leading the industry to 5G and are well positioned with our product and technology leadership to continue our expansion into many exciting new product categories, such as automotive, mobile computing, networking and the Internet of Things.”

For the entire fiscal year, Qualcomm reported net income of $2.47 billion, or $1.65 per share, compared to $5.7 billion, or $3.81 per share in the previous year.

In another concern for the company, the Wall Street Journal reported Tuesday that Apple is designing its new iPhones and iPads to exclude Qualcomm chips.

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.