Qualcomm (QCOM) 10-K risk factor changes: FY2020 vs FY2019

[removed: The] [added: However, the] risks and uncertainties described below are not the only ones we face.

Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also negatively impact our [removed: business and] [added: business,] results of [removed: operations] [added: operations, cash flows] and [added: financial condition, and] require significant management time and attention.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.” References to [removed: “and” and] [added: “and,”] “or” [added: and “and/or”] should be read to include the [removed: other as well as “and/or,”] [added: others,] as appropriate.

[removed: Risks Related to Our Businesses][added: RISKS RELATED TO OUR OPERATING BUSINESSES]

Our revenues depend on [removed: commercial network deployments, expansions and upgrades of CDMA, OFDMA and other communications technologies, including 5G;] our customers’ and licensees’ sales of products and services based on [removed: these technologies;] [added: CDMA, OFDMA] and [removed: customers’] [added: other communications technologies, including 5G, and customer] demand for our products [removed: and services.][added: based on these technologies.]

We [removed: also] depend on our customers and licensees to develop devices and services based on these technologies with value-added features to drive consumer demand for new 3G/4G and 3G/4G/5G multimode devices, as well as 3G, 4G and 5G single-mode devices, and to establish the selling prices for such devices.

Further, [removed: we depend] [added: the timing of our shipment of our products is dependent] on the timing of our customers’ and licensees’ deployments of new devices and services based on these technologies.

Increasingly, we also depend on operators of wireless networks, our customers and licensees and other third parties to incorporate these technologies into new device types and into industries and applications beyond [removed: traditional cellular communications,] [added: mobile,] such as [removed: automotive, computing, IoT (including the connected home, smart cities, wearables, voice and music and robotics)] [added: automotive] and [removed: networking,] [added: IoT,] among others.

We have historically been successful during wireless technology transitions, including [removed: 3G] [added: 3G, 4G] and [removed: 4G.][added: now 5G.]

[removed: Initial commercial] [added: Commercial] deployments of 5G networks and devices have begun and will [removed: continue into fiscal 2020 and beyond.][added: continue.]

We believe it is [removed: important] [added: critical] that we remain a leader in 5G technology development, standardization, intellectual property creation and [added: technology] licensing, and that we develop, commercialize and be a leading supplier of 5G integrated circuit [removed: products and services,] [added: products,] in order to sustain and grow our business long-term.

Our industry is subject to [added: intense] competition in an environment of rapid technological [removed: changes.][added: change.]

Our success depends in part on our ability to adapt to such [removed: changes] [added: change] and compete effectively; and such [removed: changes] [added: change] and competition could result in decreased demand for our products [added: and technologies] or declining average selling prices for our products or those of our customers or licensees.

Our [removed: products, services] [added: products] and technologies face significant competition.

We expect competition to increase as our current competitors expand their product [removed: offerings] [added: offerings, improve their products] or reduce the prices of their products as part of a strategy to maintain existing business and customers or attract new business and customers, as new opportunities [removed: develop] [added: develop,] and as new competitors enter the industry.

Competition in wireless communications is affected by various factors that include, among others: [removed: device manufacturer] [added: OEM] concentrations; vertical integration; [removed: growth in demand, consumption and] competition in certain geographic regions; government intervention or support of national industries or competitors; [added: the ability to maintain product differentiation as the result of] evolving industry standards and [removed: business models; evolving methods of transmission of voice and data communications; increasing data traffic and densification of wireless networks; convergence and aggregation] [added: speed] of [removed: connectivity technologies] [added: technological change] (including [removed: Wi-Fi and LTE) in both devices and access points; consolidation of wireless technologies and infrastructure at] the [removed: network edge; networking and connectivity trends (including cloud services); use of licensed, shared] [added: transition to smaller geometry process technologies] and [removed: unlicensed spectrum;] the [removed: evolving nature of computing (including] demand for always on, always connected capabilities); [removed: the speed of technological change (including the transition to smaller geometry process technologies);] [added: and] value-added features that drive selling prices and consumer demand for new 3G/4G and 3G/4G/5G multimode devices, as well as [removed: 3G, 4G] [added: 3G] and [removed: 5G] [added: 4G] single-mode [removed: devices; turnkey, integrated products that incorporate hardware, software, user interface, applications and reference designs; scalability; and the ability of the system technology to meet customers’ immediate and future network requirements.][added: devices.]

We anticipate that additional competitors will introduce products as a result of growth opportunities in wireless communications, the trend toward global expansion by foreign and domestic competitors, [added: and] technological and public policy [removed: changes and relatively low barriers to entry in certain segments of the industry.][added: changes.]

[removed: | • |] [added: -] differentiate our integrated circuit products with innovative technologies across multiple products and features (e.g., modem, [removed: RFFE,] [added: radio frequency front-end (RFFE), including mmWave,] graphics and other processors, camera and connectivity) and with smaller geometry process technologies that drive both performance and lower power consumption; [removed: |]

[removed: | • |] [added: -] develop and offer integrated circuit products at competitive cost and price points to effectively cover [removed: both emerging and developed] [added: all] geographic regions and all device tiers; [removed: |]

[removed: | • |] [added: - continue to be a leader in mobile, and] drive the adoption of our [added: technologies and] integrated circuit [removed: products] [added: products, including RFFE,] into the most popular device models and across a broad spectrum of [removed: devices,] [added: devices in mobile,] such as smartphones, tablets, laptops and other [added: mobile] computing [removed: devices, automobiles, wearables, voice and music and other connected devices and infrastructure products; |][added: devices;]

[removed: | • |] [added: -] maintain or accelerate demand for our integrated circuit products at the premium device tier, while also driving the adoption of our [removed: 5G] products into high, mid- and low-tier devices across all regions; [removed: |]

[removed: | • |] [added: -] remain a leader in 5G [added: (and 4G)] technology development, standardization, intellectual property creation and licensing, and develop, commercialize and [removed: be] [added: remain] a leading supplier of 5G [added: (and 4G)] integrated circuit [removed: products and services; |][added: products, including RFFE products;]

[removed: | • |] [added: -] create standalone value and contribute to the success of our existing businesses through acquisitions, joint ventures and other transactions, and by developing customer, licensee, vendor, distributor and other channel relationships in new industry segments [added: or applications] and with disruptive [removed: technologies, products and services, such as products for automotive, computing, IoT (including the connected home, smart cities, wearables, voice and music and robotics)] [added: technologies] and [removed: networking, among others; |][added: products;]

[removed: | • |] [added: -] identify potential acquisition targets that will grow or sustain our business or address strategic needs, reach agreement on terms acceptable to us, close the transactions and effectively integrate these new businesses, products and technologies; [removed: |]

[removed: | • | be a leader serving original equipment manufacturers (OEMs),] [added: - provide leading products and technologies to OEMs,] high level operating systems (HLOS) providers, operators, cloud providers and other industry participants as competitors, new industry entrants and other factors continue to affect the industry landscape; [removed: |]

[removed: | • |] [added: -] be a preferred partner and sustain preferred relationships providing integrated circuit products that support multiple operating system and infrastructure platforms to industry participants that effectively commercialize new devices using these platforms; and [removed: |]

[removed: | • |] [added: -] continue to develop brand recognition to effectively compete against better known companies in computing and other consumer driven segments and to deepen our presence in significant emerging regions and China. [removed: |]

We compete with many different semiconductor companies, ranging from multinational companies with integrated research and development, manufacturing, sales and marketing organizations across a broad spectrum of product lines, to companies that are focused on a single [removed: application market] [added: application, industry] segment or standard product, including those that produce products for [removed: automotive, computing, IoT] [added: mobile, automotive] and [removed: networking applications.][added: IoT, among others.]

Examples (some of which are strategic partners of ours in other areas) include Broadcom, [removed: Cirrus Logic, Cypress Semiconductor,] HiSilicon, [removed: Intel, Marvell, Maxim,] MediaTek, [removed: Microchip Technology, Murata, Nordic Semiconductor,] Nvidia, NXP Semiconductors, Qorvo, [removed: Realtek Semiconductor, Renesas,] Samsung, [removed: Sequans Communications, Skyworks] [added: Skyworks, Texas Instruments] and [added: UNISOC (formally known as] Spreadtrum [removed: Communications (which is controlled by Tsinghua Unigroup).][added: Communications).]

Some of these current and potential competitors may have advantages over us that include, among others: motivation by our customers in certain circumstances to use our competitors’ integrated circuit products, to utilize their own internally-developed integrated circuit [removed: products] [added: products,] or sell such products to others, or to [removed: choose] [added: utilize] alternative technologies; lower cost structures or a willingness and ability to accept lower prices or lower [removed: or negative] margins for their products, particularly in China; foreign government support of other technologies, competitors or OEMs that sell devices that do not contain our [removed: chipsets;] [added: integrated circuit products;] better known brand names; ownership and control of manufacturing facilities and greater expertise in manufacturing processes; more extensive relationships with local distribution companies and OEMs in certain geographic regions (such as China); more experience in adjacent industry segments [removed: outside traditional cellular industries] [added: or applications beyond mobile] (such as [removed: automotive, computing, IoT] [added: automotive] and [removed: networking);] [added: IoT);] and a more established presence in certain regions.

[removed: In particular, certain] [added: Certain] of our largest integrated circuit customers [added: (for example, Samsung)] develop their own integrated circuit products, which they have in the past utilized, and currently utilize, in certain of their devices and may in the future [removed: choose to] utilize in [removed: certain] [added: some] (or all) of their devices, rather than our products (and they [added: have and] may [added: continue to] sell their integrated circuit products to third parties, discretely or together with certain of their other products, in competition with us).

[added: Accordingly,] Apple [removed: may continue] [added: is expected] to use [removed: our competitors’ products in one or more of] its [removed: future devices and may develop and utilize its] own modem products, rather than our products, in [removed: one or more] [added: some (or all)] of its future devices.

[added: See also the Risk Factor entitled “*A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions.*”] Further, certain of our competitors develop and sell multiple components (including integrated circuit products) for use in devices and sell those components together to [removed: device manufacturers.][added: OEMs.]

Competition in any or all product tiers may result in the loss of business or customers, which would negatively impact our [added: business,] revenues, results of [removed: operations and] [added: operations,] cash [removed: flows.][added: flows and financial condition.]

Certain of these dynamics are particularly pronounced in emerging regions and China where competitors may have lower cost structures or may have a willingness and ability to accept lower prices or lower [removed: or negative] margins on their [removed: products (particularly in China).][added: products.]

[removed: We] [added: Although we have more than 300 licensees, we] derive a significant portion of our [added: licensing] revenues from a [removed: small] [added: limited] number of [removed: customers and] licensees, which [removed: increasingly] includes a small number of Chinese OEMs.

[removed: Our QCT segment derives] [added: We derive] a significant portion of [removed: its] [added: our] revenues from a small number of customers, and [added: particularly from their sale of premium tier devices, and] we expect this trend to continue in the foreseeable future.

Chinese OEMs continue to grow their device share in China and are increasing their device share in regions outside of China, and we derive a significant [removed: and increasing] portion of our revenues from a small number of these [removed: OEMs.][added: OEMs as well.]

In addition, certain of our largest integrated circuit customers [removed: develop their own integrated circuit products, which they] have in the past utilized, [removed: and] currently [removed: utilize, in certain of their devices] [added: utilize] and may in the future [removed: choose to] utilize [added: our competitors’ integrated circuit products] in [removed: certain] [added: some] (or all) of their devices, rather than our [removed: products (and they may sell their integrated circuit products to third parties, discretely or together with certain of their other products, in competition with us).][added: products.]

In April 2019, we entered into a new multi-year chipset supply agreement with [removed: Apple.][added: Apple and began shipping modems under this agreement in the third quarter of fiscal 2020.]

In addition to the risks and uncertainties set forth in the Risk Factor below entitled *“The recent coronavirus (COVID-19) pandemic has had an adverse effect on our business and results of operations, and we expect its impact will continue, at least in the near term,”* many of the risks and uncertainties set forth in the other Risk Factors below are exacerbated by the COVID-19 pandemic, government and business responses thereto and any further resulting decline in the global business and economic environment, and may be impacted by the extent and speed of the global economic recovery.

RISKS RELATED TO THE CORONAVIRUS (COVID-19) PANDEMIC

The recent coronavirus (COVID-19) pandemic has had an adverse effect on our business and results of operations, and we expect its impact will continue, at least in the near term.

The rapid, global spread of COVID-19 and the fear it has created has resulted in significant economic uncertainty, significant declines in business and consumer confidence and global demand in the wireless industry (among others), a global economic slowdown, and has led to a global recession.

Specifically, the decline in demand for smartphones and other consumer devices sold by our customers or licensees has resulted in decreased demand for our integrated circuit products (which are incorporated into such devices) and a decrease in the royalties we earn on the licensing of our intellectual property (which is dependent upon the number of such devices sold that utilize our intellectual property).

We expect that demand for our products and demand for the products of our customers and licensees will continue to be negatively impacted in the near term.

Further, while to date we have not seen a significant impact on our manufacturing facilities or our supply chain, the ability of our suppliers to deliver on their commitments to us, or our ability to ship our products to our customers, may be negatively impacted by the pandemic and/or government responses thereto, such as travel bans and restrictions, quarantines, shelter-in-place and social distancing orders, declarations of states of emergency and shutdowns.

Although the spread of COVID-19 has caused us to modify our workforce practices, such as having the vast majority of our employees working from home, we have not experienced a significant negative impact to our business or results of

operations.

However, we could be negatively affected in the future if, among others, a significant number of our employees, or employees who perform critical functions, become ill and/or are quarantined as the result of exposure to COVID-19, or if government policies restrict the ability of those employees to perform their critical functions.

The COVID-19 pandemic could also impact our business, results of operations and financial condition through delayed, reduced or cancelled customer orders; the inability of our customers or licensees to purchase or pay for our products or technologies; the insolvency of key suppliers, customers or licensees; delays in reporting or payments from our customers or licensees; or failures by other counterparties.

Additionally, state or federal governments may in the future increase corporate tax rates, increase employer payroll tax obligations and/or otherwise change tax laws to pay for stimulus and other actions that may be taken as a result of COVID-19.

The degree to which the COVID-19 pandemic impacts our future business, results of operations and financial condition will depend on future developments, which are uncertain, including but not limited to the duration, spread and severity of the pandemic, government responses and other actions to mitigate the spread of and to treat COVID-19, and when and to what extent normal business, economic and social activity and conditions resume.

We are similarly unable to predict the extent to which the pandemic impacts our customers, licensees, suppliers and other partners and their financial conditions, but adverse effects on these parties could also adversely affect us.

Finally, the COVID-19 pandemic makes it challenging for management to estimate the future performance of our business.

RISKS RELATED TO INDUSTRY DYNAMICS AND COMPETITION

However, the timing and scale of such deployments, in certain regions, have been and may in the future be delayed due to the COVID-19 pandemic.

Our revenues and growth in revenues could be negatively impacted, our business may be harmed and our substantial investments in these technologies may not provide us an adequate return, if our customers’ and licensees’ revenues and sales of products, particularly premium-tier products, and services using these technologies, and average selling prices of such products, decline due to, for example, the maturity of smartphone penetration in developed regions and China; our intellectual property and technical leadership included in the continued 5G standardization effort is less than in 3G and 4G standards; we are unable to drive the adoption of our products into networks and devices, including devices beyond mobile; or consumers’ rates of replacement of smartphones and other computing devices decline.

For example, if any key supplier of technologies and intellectual property to the semiconductor industry was sold to one of our competitors, it could negatively affect our ability to

procure or license such technologies and intellectual property in the future, which could have wide-ranging impacts on our business and operations.

- increase or accelerate adoption of our technologies and products in industry segments or applications outside of mobile, including automotive and IoT;

See also the Risk Factor entitled “*Our business, particularly our semiconductor business, may suffer as a result of our customers vertically integrating (i.e., developing their own integrated circuit products)*.” Further, political actions, including trade and/or national security protection policies, or other actions by governments, particularly the U.S. and Chinese governments, have in the past, currently are and could in the future limit or

prevent us from transacting business with certain of our customers or suppliers, limit, prevent or discourage certain of our customers or suppliers from transacting business with us, or make it more expensive to do so.

This could advantage our competitors by enabling them with increased sales, economies of scale, operating income and/or cash flows and/or enable critical technology transfer, allowing them to increase their investments in technology development, research and development and commercialization of products.

We derive a significant portion of our revenues from a small number of customers and licensees, and particularly from their sale of premium tier devices.

In addition, a number of our largest integrated circuit customers have developed, are developing or may develop their own integrated circuit products, or may choose our competitors’ integrated circuit products, which they have in the past utilized, currently utilize and may in the future utilize in some (or all) of their devices, rather than our products, which could significantly reduce the revenues we derive from these customers.

See also the Risk Factor entitled “*Our business, particularly our semiconductor business, may suffer as a result of our customers vertically integrating (i.e., developing their own integrated circuit products)*.”

Further, political actions, including trade and/or national security protection policies, or other actions by governments, particularly the U.S. and Chinese governments, have in the past and could in the future limit or prevent us from transacting business with some of our largest customers, limit, prevent or discourage those customers from transacting business with us, or make it more expensive to do so, any of which could also significantly reduce the revenues we derive from these customers.

See also the Risk Factor entitled “*A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions*.”

Our business, particularly our semiconductor business, may suffer as a result of our customers vertically integrating (i.e., developing their own integrated circuit products).

Apple has utilized modem products of one of our competitors in some of its devices rather than our products, and solely utilized one of our competitors’ products in several of its recent device launches.

In December 2019, Apple acquired Intel’s modem assets and is developing its own modem products using these assets.

If some or all of our largest customers and/or the largest smartphone OEMs utilize their own integrated circuit/modem products in some (or all) of their devices rather than our products, our business, revenues, results of operations, cash flows and financial position could be materially adversely impacted.

See also the Risk Factor entitled “*We derive a significant portion of our revenues from a small number of customers and licensees, and particularly from their sale of premium tier devices.

If revenues derived from these customers or licensees decrease or the timing of such revenues fluctuates, our business and results of operations could be negatively affected*.”

A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions.

We derive a significant portion of our revenues from Chinese OEMs, and from non-Chinese OEMs that utilize our integrated circuit products in their devices and sell those devices into China, which has the largest number of smartphone users in the world.

We also source certain critical integrated circuit products from suppliers in China.

Due to various factors, including pressure, encouragement or incentives from, or policies of, the Chinese government (including its *Made in China 2025* campaign), concerns over losing access to our integrated circuit products as a result of actual, threatened or potential U.S. or Chinese government actions or policies, including trade protection or national security

policies, or other reasons, some of our Chinese integrated circuit customers have developed, and others may in the future develop, their own integrated circuit products and use such integrated circuit products in their devices, or use our competitors’ integrated circuit products in their devices, rather than our products.

We depend on operators of wireless networks and our customers and licensees to adopt and implement the latest generation of these technologies for use in their networks, devices and services.

The next generation of wireless technologies is 5G, which we expect will empower a new era of connected devices and will be utilized not only in handsets but in new device types, industries and applications beyond traditional cellular communications, as described above (see also Part I, Item 1, “Business” for further description of 5G).

Our revenues and growth in revenues could be negatively impacted, our business may be harmed and our substantial investments in these technologies may not provide us an adequate return, if:

| | |

| --- | --- |

| • | wireless operators and industries beyond traditional cellular communications deploy alternative technologies; |

| • | wireless operators delay next-generation network deployments, expansions or upgrades or delay moving customers to 3G/4G and 3G/4G/5G multimode devices, as well as 4G and 5G single-mode devices; |

| • | LTE, an OFDMA-based wireless technology, is not more widely deployed or further commercial deployment is delayed; |

| • | government regulators delay making sufficient spectrum available for 4G and 5G wireless technologies, including unlicensed spectrum and shared spectrum technologies, thereby delaying or precluding the initial deployment or expanded deployment of these technologies; |

| • | wireless operators delay or do not drive improvements in 4G or 5G, or 3G/4G or 3G/4G/5G multimode network performance and capacity; |

| • | our customers’ and licensees’ revenues and sales of products, particularly premium-tier products, and services using these technologies, and average selling prices (ASPs) of such products, decline, do not grow or do not grow meaningfully due to, for example, the maturity of smartphone penetration in developed regions; |

| • | our intellectual property and technical leadership included in the continued 5G standardization effort is different than in 3G and 4G standards; |

| • | the continued standardization or commercial deployment of 5G technologies is delayed; |

| • | we are unable to drive the adoption of our products and services into networks and devices, including devices beyond traditional cellular applications, based on CDMA, OFDMA and other communications technologies; or |

| • | consumers’ rates of replacement of smartphones and other computing devices decline, do not grow or do not grow meaningfully. |

| • | continue to be a leader in 4G and 5G technology evolution and continue to innovate and introduce 4G and 5G turnkey, integrated products and services that differentiate us from our competition; |

| • | increase or accelerate demand for our semiconductor component products, including RFFE, and our wireless connectivity products, including networking products for consumers, carriers and enterprise equipment and connected devices; |

| • | become a leading supplier of RFFE products, which are designed to address cellular radio frequency band fragmentation while improving radio frequency performance and assist original equipment manufacturers in developing multiband, multimode mobile devices; |

Also, Apple, which has historically been one of our largest customers, now utilizes products of one of our competitors in many of their devices rather than our products and is solely utilizing one of our competitor’s products in its most recent smartphone launch.

Also, Apple, which has historically been one of our largest customers, utilizes products of one of our competitors in many of their devices rather than our products and is solely utilizing one of our competitor’s products in its most recent smartphone launch.

We do not expect to begin recording revenues under this agreement until the second half of fiscal 2020.

However, Apple may continue to use our competitors’ products in one or more of its future devices and may develop and utilize its own modem products, rather than our products, in one or more of its future devices.

the timing of such customers’ new or next generation product introductions, over which we have no control, and the timing and success of such introductions may cause our revenues and results of operations to fluctuate.

Accordingly, if current industry dynamics continue, our QCT segment’s revenues will continue to depend largely upon, and be impacted by, future purchases, and the timing and size of any such future purchases, by these significant customers.

Further, companies that develop HLOS for devices, including leading technology companies, sell their own devices.

If we fail to effectively partner or continue partnering with these companies, or with their partners or customers, they may decide not to purchase (either directly or through their contract manufacturers), or to reduce or discontinue their purchases of, our integrated circuit products.

In addition, there has been and continues to be litigation among certain of our customers and other industry participants, and the potential outcomes of such litigation, including but not limited to injunctions against devices that incorporate our products or intellectual property, and rulings on certain patent law or patent licensing issues that create new legal precedent, could impact our business, particularly if such action impacts one of our larger customers.

Although we have more than 300 licensees, our QTL segment derives a significant portion of its revenues from a limited number of licensees, which increasingly includes a small number of Chinese OEMs.

If sales of premium-tier devices decrease, or sales of our premium-tier integrated circuit products decrease, our results of operations could be negatively affected.

We derive a significant portion of our revenues from the premium-tier device segment, and we expect this trend to continue in the foreseeable future.

In addition, as discussed in the prior risk factor, our industry is experiencing concentration of device share at the premium tier among a few companies, which gives them significant leverage.

These dynamics may result in reduced sales of or lower prices for our premium-tier integrated circuit products.

Further, certain licensees and companies are currently engaged in such behavior and they or others may engage in such behavior in the future.

technologies, limiting our ability to seek injunctions against infringers of our standard-essential patents, constraining our ability to make licensing commitments when submitting our technology for inclusion in future standards (which could make our technology less likely to be included in such standards) or forcing us to work outside of SDOs or other industry groups to promote our new technologies, and our revenues, results of operations and cash flows could be negatively impacted.

Further, if our appeal in the FTC lawsuit is unsuccessful, it could have a material adverse effect on our business.

If these events occur, our financial outlook and stock price could decline, possibly significantly.

Commitments and Contingencies.” We believe that one intent

We historically licensed our cellular standard-essential patents together with our other patents that may be useful to licensed products because licensees desired to obtain the commercial benefits of receiving such broad patent rights from us.

However, we also licensed only our cellular standard-essential patents to certain licensees who requested such licenses.

Since 2015, our standard practice in China is to offer licenses to our 3G and 4G (and now 5G) cellular standard-essential Chinese patents for devices sold for use in China separately from our other patents.

Revenues were [removed: $24.3] [added: $23.5] billion, [removed: an increase] [added: a decrease] of [removed: 7% from] [added: 3% compared to revenues of $24.3 billion in] fiscal [removed: 2018,] [added: 2019,] with net income of [removed: $4.4] [added: $5.2] billion, [added: an increase of 19%] compared to net [removed: loss] [added: income] of [removed: $5.0] [added: $4.4] billion in fiscal [removed: 2018.][added: 2019.]

Highlights and other events from fiscal [removed: 2019] [added: 2020 and other recent events] included:

[removed: | • |] QTL revenues in fiscal 2019 included $450 million [removed: paid] [added: of royalties due] under a second interim agreement with Huawei that concluded in the third quarter of fiscal [removed: 2019, and although negotiations continue, we have not reached a final agreement with Huawei. This represents a minimum, non-refundable amount for royalties due and does not reflect the full amount of royalties due under the underlying license agreement. We did not record any revenues in the fourth quarter of fiscal 2019 for royalties due on the sales of Huawei’s products. |][added: 2019.]

[removed: We recorded net restructuring and restructuring-related charges of] [added: \+] $213 million in [removed: fiscal 2019] [added: net charges] related to our Cost [removed: Plan.][added: Plan]

We conduct business primarily through our QCT (Qualcomm CDMA Technologies) semiconductor business and our QTL (Qualcomm [removed: Technology Licensing) licensing business.]

[removed: QTL grants] [added: Revenue Recognition. We grant] licenses or otherwise [removed: provides] [added: provide] rights to use portions of our intellectual property portfolio, which, among other rights, includes certain patent rights essential to and/or useful in the manufacture, sale [removed: and/or] [added: or] use of certain wireless products.

We also have nonreportable segments, including [removed: Qualcomm Government Technologies or] QGOV [removed: (formerly Qualcomm Cyber Security Solutions)] [added: (Qualcomm Government Technologies), our cloud AI inference processing initiative] and other [removed: wireless] technology and service initiatives.

Seasonality. Many of our products [removed: and/or] [added: and] much of our intellectual property are incorporated into consumer wireless devices, which are subject to seasonality and other fluctuations in demand.

This has resulted in fluctuations in QCT revenues in advance of and during device launches incorporating our products and in QTL revenues when the related royalties were recognized, which prior to fiscal 2019 was when licensees reported their sales and beginning in fiscal 2019 [removed: was] when the licensees’ sales occurred.

Our historical trends were impacted by our prior dispute with Apple and its contract [removed: manufacturers, which] [added: manufacturers (which] was settled in April [removed: 2019.][added: 2019).]

Further, the trends for QTL have been, [removed: and/or] [added: and] may in the future be, impacted by disputes and/or resolutions with licensees and/or governmental investigations or proceedings, including the lawsuit filed against us by the FTC.

| Revenues (in millions) | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| | [added: | | 2020 | | | | | |] 2019 | | | | [removed: 2018] | | [added: 2018] | | [removed: 2017] | | | | [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] Change | | | | [removed: 2018] [added: | | 2019] vs. [removed: 2017] [added: 2018] Change | | |

| Equipment and services | [added: | |] $ | [removed: 14,611] [added: 16,298] | | | [added: | |] $ | [removed: 17,400] [added: 14,611] | | | [added: | |] $ | [removed: 16,647] [added: 17,400] | | | [added: | |] $ | [removed: (2,789] [added: 1,687] | [removed: )] | | [added: | |] $ | [removed: 753] [added: (2,789)] | |

| Licensing | [added: | | 7,233 | | | | | |] 9,662 | | | | [added: | |] 5,211 | | | | [removed: 5,611] | | [added: (2,429)] | | [removed: 4,451] | | | | [removed: (400] [added: 4,451] | | [removed: )] |

| | [added: | |] $ | [removed: 24,273] [added: 23,531] | | | [added: | |] $ | [removed: 22,611] [added: 24,273] | | | [added: | |] $ | [removed: 22,258] [added: 22,611] | | | [added: | |] $ | [removed: 1,662] [added: (742)] | | | [added: | |] $ | [removed: 353] [added: 1,662] | |

[removed: | + |] [added: \-] $4.7 billion in licensing revenues recorded in the third quarter of fiscal 2019 resulting from the settlement with Apple and its contract manufacturers (which were not allocated to our segment results) [removed: |]

[removed: |] \- [removed: |] $2.7 billion in lower equipment and services revenues from our QCT segment [removed: |]

[removed: |] \- [removed: |] $451 million in lower licensing revenues from our QTL segment [removed: |]

The increase in [added: QTL licensing] revenues in fiscal [removed: 2018] [added: 2020] was primarily due to:

[removed: | + | $745 million] [added: \+ $1.8 billion] in higher equipment and services revenues from our QCT segment [removed: |]

[removed: | \- | $1.4 billion] [added: + $437 million] in [removed: lower] [added: higher] licensing revenues from our QTL segment [removed: |]

| Costs and Expenses (in millions, except percentages) | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Cost of revenues | [added: | |] $ | [removed: 8,599] [added: 9,255] | | | [added: | |] $ | [removed: 10,244] [added: 8,599] | | | [added: | |] $ | [removed: 9,792] [added: 10,244] | | | [added: | |] $ | [removed: (1,645] [added: 656] | [removed: )] | | [added: | |] $ | [removed: 452] [added: (1,645)] | |

| Gross margin | [added: | | 61 | | % | | | |] 65 | | % | | [added: | |] 55 | | % | | [removed: 56] | | [removed: %] | | | | | | | | |

[removed: |] + [removed: |] higher licensing revenues resulting from the settlement with Apple and its contract manufacturers in fiscal 2019 [removed: |]

The decrease in margin percentage in fiscal [removed: 2018] [added: 2020] was primarily due to:

| Research and development | [added: | |] $ | [removed: 5,398] [added: 5,975] | | | [added: | |] $ | [removed: 5,625] [added: 5,398] | | | [added: | |] $ | [removed: 5,485] [added: 5,625] | | | [added: | |] $ | [removed: (227] [added: 577] | [removed: )] | | [added: | |] $ | [removed: 140] [added: (227)] | |

| % of revenues | [removed: 22] | | [added: 25 | |] % | | [removed: 25] | | [added: 22 | |] % | | [added: | |] 25 | | % | | | | | | | | | [added: | | | |]

The [removed: dollar] decrease in research and development expenses in fiscal 2019 was primarily due to:

[removed: |] \- [removed: |] $221 million decrease primarily driven by actions taken under our Cost [removed: Plan,] [added: Plan that concluded in fiscal 2019,] partially offset by higher share-based compensation expense and higher employee cash incentive [removed: programs |][added: program costs]

The [removed: dollar] increase in research and development expenses in fiscal [removed: 2018] [added: 2020] was primarily due to:

| Selling, general and administrative | [added: | |] $ | [removed: 2,195] [added: 2,074] | | | [added: | |] $ | [removed: 2,986] [added: 2,195] | | | [added: | |] $ | [removed: 2,658] [added: 2,986] | | | [added: | |] $ | [removed: (791] [added: (121)] | [removed: )] | | [added: | |] $ | [removed: 328] [added: (791)] | |

| % of revenues | [added: | |] 9 | | % | | [removed: 13] | | [added: 9 | |] % | | [removed: 12] | | [added: 13 | |] % | | | | | | | | | [added: | | | |]

The [removed: dollar] decrease in selling, general and administrative expenses in fiscal 2019 was primarily due to:

[removed: |] \- [removed: |] $287 million in lower professional fees and costs, primarily driven by Broadcom’s withdrawn takeover proposal in fiscal 2018 and our then proposed acquisition of NXP Semiconductors N.V. (NXP) in fiscal 2018 [removed: |]

[removed: |] \- [removed: |] $235 million in lower litigation costs, primarily resulting from the settlement of our prior dispute with Apple and its contract manufacturers and the end of the District Court trial in the lawsuit filed against us by the FTC [removed: |]

[removed: |] \- [removed: |] $162 million in lower employee-related expenses, primarily driven by actions taken under our Cost Plan [removed: |]

[removed: |] \- [removed: |] $75 million in lower sales and marketing expenses, primarily driven by actions taken under our Cost Plan [removed: |]

The [removed: dollar increase] [added: decrease] in selling, general and administrative expenses in fiscal [removed: 2018] [added: 2020] was primarily due to:

Fiscal 2020 Overview and Other Recent Events

- The rapid, global spread of COVID-19 has negatively impacted consumer demand for certain devices that incorporate our products and intellectual property, which negatively impacted our business and results of operations in fiscal 2020.

The impact of the COVID-19 pandemic on sales of devices that incorporate our products and intellectual property was most significant in the March 2020 and June 2020 quarters.

The impact of COVID-19 on our ability to fulfill customer orders has been minimal.

Workforce changes that we implemented in the second quarter of fiscal 2020 remained in effect throughout fiscal 2020.

- In July 2020, we entered into a settlement agreement with Huawei to resolve our prior dispute related to our license agreement that expired on December 31, 2019.

We also entered into a new long-term, global patent license agreement that contains a cross license granting rights to certain of Huawei’s patents and applies to sales of certain wireless products by Huawei beginning on January 1, 2020.

Amounts due under the settlement agreement (which are incremental to the $1.2 billion previously paid under two interim agreements) are to be paid in installments by the end of June 2021 in accordance with an agreed upon payment schedule.

We recorded revenues of $1.8 billion in fiscal 2020, which were not allocated to our segment results, related to the amounts due from Huawei under the settlement agreement and royalties for sales made in the March 2020 and June 2020 quarters under the new global patent license agreement.

In the fourth quarter of fiscal 2020, Huawei paid the first installment under the settlement agreement and the royalties due for the March 2020 and June 2020 quarters.

- QCT results in fiscal 2020 benefited from an increase in demand for 5G and IoT products, partially offset by the negative impact of COVID-19.

Additionally, in the second half of fiscal 2020, QCT began shipments under the multi-year chipset supply agreement with Apple to support 2020 iPhone product launches.

- QTL results in fiscal 2020 benefited from the inclusion of a full year of royalties from Apple (as a result of the settlement with Apple and its contract manufacturers in April 2019) and an estimate of royalties due from Huawei for sales made in the September 2020 quarter, partially offset by the negative impact of COVID-19.

- We entered into new long-term, world-wide patent license agreements with Guangdong OPPO Mobile Telecommunications Corp., Ltd. (Oppo) and BBK Communication Technology Co., Ltd. (vivo) (who were previously disclosed as two key Chinese licensees), effective as of April 1, 2020.

We also reached agreements with these licensees to provide for scheduled payments of amounts due under the license agreements that expired on March 31, 2020 and for which certain of such amounts for prior periods were withheld while good faith negotiations occurred.

Oppo and vivo paid all such amounts due under the settlement agreements by the end of September 2020.

On August 11, 2020, on appeal, the Ninth Circuit reversed the district court’s judgment, vacated its injunction and vacated its partial grant of summary judgment.

On September 25, 2020, the FTC filed a Petition for Rehearing *En Banc*.

On October 28, 2020, the Ninth Circuit denied the FTC’s petition.

- In fiscal 2020, we recorded $405 million in non-marketable investment impairments, a portion of which was due in part from the impacts of COVID-19 on certain of our investees.

Technology Licensing) licensing business.

Looking forward, we expect QCT revenues to be impacted by seasonal trends related to product launch timing for sales made to Apple under our multi-year chipset supply agreement.

These trends may or may not continue in the future and have been impacted by the decline in consumer demand resulting from COVID-19.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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2020 vs. 2019

The decrease in revenues in fiscal 2020 was primarily due to:

\- $116 million in lower equipment and services revenues from our QSI segment

\+ $1.8 billion in licensing revenues from Huawei recorded in the fourth quarter of fiscal 2020 resulting from amounts due under the settlement agreement and royalties for sales made in the March 2020 and June 2020 quarters under the new global patent license agreement (which were not allocated to our segment results)

\+ $4.7 billion in licensing revenues recorded in the third quarter of fiscal 2019 resulting from the settlement with Apple and its contract manufacturers

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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2020 vs. 2019

\- lower licensing revenues resulting from the settlement with Apple and its contract manufacturers in fiscal 2019

+ higher licensing revenues from Huawei recorded in fiscal 2020 resulting from amounts due under the settlement agreement and royalties for sales made in the March 2020 and June 2020 quarters under the new global patent license agreement

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2020 vs. 2019 Change | | | | | | 2019 vs. 2018 Change | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Fiscal 2019 Overview

| | |

| --- | --- |

| • | From October 2018 through September 2019, approximately 1.4 billion smartphones are estimated to have shipped globally, representing a year-over-year decrease of approximately 4% (IDC, Mobile Phone Tracker, 2019Q3), primarily driven by further lengthening of replacement cycles, particularly in developed regions and China where consumer demand is increasingly driven by new product launches and/or innovation cycles as the industry transitions to 5G. |

| • | QCT results in fiscal 2019 were negatively impacted by lower modem sales to Apple. |

| • | In April 2019, we entered into settlement agreements with Apple and its contract manufacturers to dismiss all outstanding litigation between the parties. We also entered into a six-year global patent license agreement with Apple, effective as of April 1, 2019, which includes an option for Apple to extend for two additional years, and a multi-year chipset supply agreement with Apple. In the third quarter of fiscal 2019, we recognized licensing revenues of $4.7 billion resulting from the settlement, consisting of a payment from Apple and the release of certain of our obligations to pay Apple and its contract manufacturers customer-related liabilities. In addition, our QTL results for the third and fourth quarters of fiscal 2019 included royalties from Apple and its contract manufacturers for sales made in such quarters. |

| • | QTL results in fiscal 2019 reflected certain reductions made in the per unit royalty caps (which provide a maximum royalty amount payable per device) in fiscal 2019 and 2018. While we expect these changes to enhance stability for the long term, they negatively impacted QTL royalty revenues in fiscal 2019. In addition, an increasing number of new and existing licensees have elected to enter into worldwide license agreements covering only our cellular standard essential patents, resulting in lower QTL royalty revenues in fiscal 2019. |

| • | In May 2019, in *United States Federal Trade Commission (FTC) v. QUALCOMM Incorporated*, the court issued an Order ruling against us and imposing certain injunctive relief. We disagree with the court’s conclusions, interpretation of the facts and application of the law. Accordingly, we filed a motion to stay certain of the remedies with, and have appealed the decision to, the Ninth Circuit Court of Appeals (Ninth Circuit). In August 2019, our partial motion to stay was granted in its entirety by the Ninth Circuit. The impact of the Order and the Ninth Circuit granting our motion for partial stay did not have a material impact to QTL licensing revenues recognized in fiscal 2019 based on facts and factors currently known by us. |

| • | In July 2019, the European Commission (EC) issued a decision ruling that between 2009 and 2011 we engaged in predatory pricing with respect to two customers and imposed a fine (2019 EC fine) of approximately 242 million Euros, which resulted in a $275 million charge to other expenses in the third quarter of fiscal 2019. In October 2019, we filed an appeal of the EC’s decision, and we provided a financial guarantee to satisfy the obligation in lieu of a cash payment while we appeal the EC’s decision. |

| • | In the second quarter of fiscal 2018, we announced a Cost Plan designed to align our cost structure to our long-term margin targets. As part of this plan, we initiated a series of targeted actions across our businesses with the objective to reduce annual costs by $1 billion, excluding incremental costs resulting from any future acquisition of a business. Actions taken under this plan have been completed and resulted in us achieving substantially all of this target in fiscal |

2019 based on our run rate exiting the second quarter of fiscal 2019, excluding litigation costs that were in excess of the baseline spend.

| • | Beginning in fiscal 2019, certain provisions of the 2017 U.S. Tax Cuts and Jobs Act (the Tax Legislation) became effective, including new taxes on certain foreign income. Our estimated annual effective tax rate for fiscal 2019 reflected the effects of these provisions of the Tax Legislation, and it also included the effects of tax elections made by several of our foreign subsidiaries in the first quarter of fiscal 2019 to be treated as U.S. branches for federal income tax purposes effective beginning in fiscal 2018 and 2019, which resulted in an income tax benefit of $570 million recorded discretely in the first quarter of fiscal 2019. |

| • | During the third quarter of fiscal 2019, the United States Treasury Department issued new temporary regulations that resulted in a change to the deductibility of dividend income received by a U.S. stockholder from a foreign corporation. As a result of this change, pursuant to an agreement with the Internal Revenue Service, we relinquished the federal tax basis step-up of intellectual property that was distributed in fiscal 2018 by one of our foreign subsidiaries to a U.S. subsidiary. Therefore, the related deferred tax asset was derecognized, resulting in a $2.5 billion charge to income tax expense in the third quarter of fiscal 2019. |

QCT develops and supplies integrated circuits and system software based on CDMA, OFDMA and other technologies for use in mobile devices (primarily smartphones), tablets, laptops, data modules, handheld wireless computers and gaming devices, access points and routers, broadband gateway equipment, data cards and infrastructure equipment, IoT devices and applications, other consumer electronics and automotive telematics and infotainment systems.

Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries.

Substantially all of our products and services businesses, including QCT, and substantially all of our engineering, research and development functions, are operated by Qualcomm Technologies, Inc. (QTI), a wholly-owned subsidiary of QUALCOMM Incorporated, and QTI’s subsidiaries.

QTL is operated by QUALCOMM Incorporated, which owns the vast majority of our patent portfolio.

Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated.

We expect to begin recording revenues for new chipset models under our recently announced multi-year chipset agreement with Apple in the second half of fiscal 2020.

These trends may or may not continue in the future.

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2018 vs. 2017

| + | $962 million reduction to licensing revenues recorded in fiscal 2017 related to the BlackBerry arbitration (which was not allocated to our segment results) |

| \- | $100 million reduction to licensing revenues recorded in fiscal 2018 related to a portion of a business arrangement that resolved a legal dispute (which was not allocated to our segment results) |

| \- | decrease in higher margin QTL licensing revenues as a proportion of total revenues |

| \- | reduction to licensing revenues recorded in fiscal 2018 related to a portion of a business arrangement that resolved a legal dispute |

| + | reduction to licensing revenues recorded in fiscal 2017 related to the BlackBerry arbitration |

Our margin percentage may continue to fluctuate in future periods depending on the mix of segment results as well as products sold, competitive pricing, new product introduction costs and other factors, including disputes and/or resolutions with licensees and/or governmental investigations or proceedings, including the lawsuit filed against us by the FTC.

| + | $168 million, net of cost decreases driven by actions taken under our Cost Plan, in higher costs related to the development of wireless and integrated circuit technologies, including 5G technologies and RFFE technologies from the formation of RF360 Holdings in the second quarter of fiscal 2017 |

| \- | $30 million impairment charge on certain intangible assets recorded in fiscal 2017 |

| + | $325 million in higher litigation costs, with total litigation costs of $554 million and $229 million in fiscal 2018 and fiscal 2017, respectively |

| + | $45 million in bad debt expense recorded in fiscal 2018 |

| + | $42 million in higher professional fees and costs related to other legal matters, which was primarily driven by Broadcom’s withdrawn takeover proposal, partially offset by lower third-party acquisition and integration services fees |

| \- | $40 million in lower amortization expense, primarily from the formation of RF360 Holdings |

| \- | $37 million in lower share-based compensation expense, primarily due to actions taken under our Cost Plan |

| + | $213 million net charges related to our Cost Plan |

2017

Other expense in fiscal 2017 consisted of:

| + | $927 million charge related to the KFTC fine, including related foreign currency losses |

[removed: On July 26,] [added: In fiscal] 2018, we announced that we had been authorized to repurchase up to $30 billion of our common stock.

Equity Price Risk. At September [removed: 29, 2019,] [added: 27, 2020,] the recorded value of our marketable equity securities was [removed: $418] [added: $352] million.

A 10% decrease in the market price of our marketable equity securities at September [removed: 30, 2018] [added: 27, 2020] would have caused a decrease in the carrying amounts of these securities of [removed: $17] [added: $35] million.

Interest Rate Risk. We invest a portion of our cash in a number of diversified fixed- and floating-rate securities consisting of cash equivalents, marketable debt securities and [added: time and] demand deposits that are subject to interest rate risk.

At September 29, [removed: 2019 and September 30, 2018,] [added: 2019,] a hypothetical increase in interest rates of 100 basis points across the entire yield curve on our holdings would have resulted in a negligible decrease in the fair value of our holdings.

Consequently, we could incur [removed: impairment losses or realized] [added: significant] losses on [removed: all or a part of the values of] our non-marketable equity investments.

At September [removed: 29, 2019,] [added: 27, 2020,] the aggregate carrying value of our non-marketable equity investments was included in other noncurrent assets and was [removed: $1.1 billion.][added: $982 million.]

The interest rates on our floating-rate notes [removed: and interest rate swaps] are based on LIBOR.

At September [removed: 29, 2019,] [added: 27, 2020,] a hypothetical increase in LIBOR-based interest rates of 100 basis points would cause [removed: our] [added: a negligible increase to] interest expense [removed: to increase by $18 million] on an annualized basis as it relates to our floating-rate [removed: notes and interest rate swap agreements.][added: notes.]

Additional information regarding our notes and [removed: related interest rate swap agreements and] commercial paper program is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 1.

Foreign Currency Options. At September [removed: 29, 2019,] [added: 27, 2020,] our net [removed: asset] [added: liability] related to foreign currency options designated as hedges of foreign currency risk on royalties earned from certain licensees was negligible.

If our forecasted royalty revenues for currencies in which we hedge were to decline by [removed: 20%] [added: 10%] and foreign exchange rates were to change unfavorably by [removed: 20%] [added: 10%] in our hedged foreign currency, we would not incur a loss as our hedge positions would continue to be fully effective.

Based on forecasts at September [removed: 30, 2018,] [added: 29, 2019,] assuming the same hypothetical market conditions, we would also not have incurred a loss.

Foreign Currency Forwards. At September [removed: 29, 2019,] [added: 27, 2020,] our net asset related to foreign currency forward contracts designated as hedges of foreign currency risk on certain operating expenditure transactions was [removed: negligible.][added: $49 million.]

If our forecasted operating expenditures for currencies in which we hedge were to decline by [removed: 20%] [added: 10%] and foreign exchange rates were to change unfavorably by [removed: 20%] [added: 10%] in our hedged foreign currency, we would [added: not] incur a [removed: negligible loss.][added: loss as our hedge positions would continue to be fully effective.]

Based on forecasts at September [removed: 30, 2018,] [added: 29, 2019,] assuming the same hypothetical market conditions, [removed: a negligible loss] [added: we] would also [added: not] have [removed: been incurred.][added: incurred a loss.]

At September [removed: 29, 2019,] [added: 27, 2020,] our net [removed: asset] [added: liability] related to foreign currency forward contracts not designated as hedging instruments used to manage foreign currency risk on certain receivables and payables was negligible.

If the foreign exchange rates were to change unfavorably by [removed: 20%] [added: 10%] in our hedged foreign currency, we would not incur a loss as the change in the fair value of the foreign currency option and forward contracts would be offset by the change in fair value of the related receivables and/or payables being economically hedged.

Net Investment Hedges. At September [removed: 29, 2019,] [added: 27, 2020,] we have designated $1.4 billion of foreign currency-denominated [removed: liabilities] [added: liabilities, excluding accrued interest,] as hedges of our net investment in certain foreign subsidiaries.

If foreign exchange rates were to change unfavorably by 10% in our hedged foreign currency, there would be an increase of [removed: $136] [added: $144] million in the accumulated other comprehensive loss attributable to the cumulative [added: foreign currency] translation adjustment at September [removed: 29, 2019] [added: 27, 2020] related to our net investment hedges.

The change in value recorded in cumulative [added: foreign currency] translation adjustment would be expected to offset a corresponding foreign currency translation gain or loss from our investment in foreign subsidiaries.

At September 27, 2020, a hypothetical increase in interest rates of 100 basis points across the entire yield curve on our holdings would have resulted in a decrease of $32 million in the fair value of our holdings.

Beginning in the second quarter of fiscal 2020, the rapid, global spread of COVID-19 and the uncertainty it has created has resulted in significant volatility in the condition of economies and financial markets globally and has led to a global recession.

This has adversely affected certain of our non-marketable equity investments.

Debt

Interest Rate Risk. As substantially all of our debt is comprised of unsecured fixed-rate notes, we are not subject to significant interest rate risk.

At September 27, 2020, we had an aggregate principal amount of $500 million in unsecured floating-rate notes due January 30, 2023.

At September 27, 2020, we also had $500 million in commercial paper outstanding, for which our exposure to interest rate risk is negligible based on the original maturities of approximately three months or less.

Based on forecasts at September 29, 2019, assuming the same hypothetical market conditions, we would also not have incurred a loss.

Changes in the general level of interest rates can affect the fair value of our investment portfolio.

If interest rates in the general economy were to rise, our holdings could lose value.

As a result of divesting a substantial portion of our marketable securities portfolio and changes in portfolio allocation, the fair value of our investment portfolio is subject to lower interest rate risk.

Debt and Interest Rate Swap Agreements

Interest Rate Risk. At September 29, 2019, we have an aggregate principal amount of $15.5 billion of unsecured floating- and fixed-rate notes with varying maturity dates.

We have also entered into interest rate swaps with an aggregate notional amount of $1.8 billion to effectively convert certain fixed-rate interest payments into floating-rate payments.

At September 30, 2018, a hypothetical increase in LIBOR-based interest rates of 100 basis points would have caused our interest expense to increase by $22 million on an annualized basis as it relates to our floating-rate notes and interest rate swap agreements.

Additionally, we have a commercial paper program that provides for the issuance of up to $5.0 billion of commercial paper.

At September 29, 2019, we had $499 million of commercial paper outstanding, with original maturities of less than three months.

Changes in interest rates could affect the amounts of interest that we pay if we refinance the current outstanding commercial paper with new debt.

The fiscal years ended September [removed: 29, 2019] [added: 27, 2020] and September [removed: 24, 2017] [added: 29, 2019] included 52 weeks.

We are a [removed: pioneer] [added: leader] in 3G (third [removed: generation) and] [added: generation),] 4G (fourth generation) [removed: wireless technologies] and [removed: are a leader in] 5G (fifth generation) wireless [removed: technologies to empower a new era of intelligent, connected devices.][added: technologies.]

Our technologies and products are also used in industry segments [removed: and] [added: or] applications beyond mobile, including [removed: automotive, computing, IoT (Internet] [added: automotive and internet] of [removed: Things)] [added: things (IoT) (which includes connectivity] and networking, [removed: allowing devices and objects to connect] [added: computing] and [removed: communicate with each other in new ways.][added: fixed wireless broadband), among others.]

We derive revenues principally from sales of integrated circuit products and licensing [added: of] our intellectual property, including patents and other rights.

We share these inventions broadly through our licensing program, enabling wide ecosystem access to technologies at the core of mobile innovation, and through the sale of our wireless integrated circuit platforms (also known as chips or chipsets) and other [removed: products, which accelerates consumer adoption of experiences empowered by these inventions.][added: products.]

[removed: As a company, we] [added: We] collaborate across the ecosystem, including manufacturers, operators, developers, [added: system integrators, cloud providers,] governments and industry standards organizations, to enable a global environment to drive continued progress and growth.

This includes the CDMA (Code Division Multiple Access) and OFDMA (Orthogonal Frequency Division Multiple Access) families of technologies, with the latter encompassing LTE (Long Term [removed: Evolution),] [added: Evolution) and 5G NR (New Radio),] which, along with TDMA (Time Division Multiple Access), are the primary digital technologies currently used to transmit [removed: a wireless device user’s] voice or data over radio waves using a public [added: or private] cellular wireless network.

We own significant intellectual property, including patents, patent applications and trade secrets, applicable to products that implement any version of CDMA [removed: and OFDMA.][added: and/or OFDMA technologies.]

[added: Companies in the mobile industry generally recognize that any company] seeking to develop, manufacture and/or sell devices or infrastructure equipment that use CDMA-based and/or OFDMA-based technologies will require a license or other rights to use our patents.

We also develop and commercialize numerous other key technologies used in mobile and other wireless [removed: devices that help drive end-user demand,] [added: devices,] and we own substantial intellectual property related to these technologies.

[removed: Other] technologies that [removed: we have developed and that] are [removed: widely] used by wireless devices [added: that] are not related to [removed: any] industry standards, such as operating systems, user interfaces, graphics and camera processing functionality, RF (radio frequency), [removed: RF front-end (RFFE)] [added: RFFE (radio frequency front-end)] and antenna [removed: designs] [added: designs, artificial intelligence (AI)] and [added: machine learning techniques and] application processor architectures.

QCT develops and supplies integrated circuits and system software based on [removed: CDMA, OFDMA] [added: 3G/4G/5G] and other technologies for use in mobile devices, wireless networks, broadband gateway equipment, consumer electronic devices, [added: other] devices used in IoT and automotive [added: systems for] telematics and [removed: infotainment systems.][added: infotainment.]

QTL grants licenses [added: or otherwise provides rights] to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products.

We also have nonreportable segments, including Qualcomm Government Technologies or [removed: QGOV (formerly Qualcomm Cyber Security Solutions), as well as] [added: QGOV, our cloud AI inference processing initiative and] other [removed: wireless] technology and service initiatives.

The scale and pace of innovation in the mobile industry, especially around connectivity and computing [removed: capabilities,] [added: technologies,] is also impacting industries beyond wireless, empowering new services, new business models and new experiences.

Advancing connectivity. [removed: 3G/4G multimode] [added: 3G and 4G] mobile broadband [removed: technology has] [added: technologies have] been [removed: a] key [removed: innovation] [added: innovations] of mobile, providing users with fast, reliable, always-on connectivity.

As of September 30, [removed: 2019,] [added: 2020,] there were approximately [removed: 6.0] [added: 6.2] billion 3G/4G connections [removed: globally (CDMA-based, OFDMA-based and CDMA/OFDMA multimode)] [added: globally,] representing [removed: 76%] [added: 78%] of total mobile connections (GSMA Intelligence, November [removed: 2019).][added: 2020).]

By [removed: 2023,] [added: 2024,] global 3G/4G connections are projected to reach [removed: 7.0] [added: 6.5] billion, with approximately [removed: 88%] [added: 89%] of these connections [removed: coming from] [added: in] emerging regions and China (GSMA Intelligence, November [removed: 2019).][added: 2020).]

With the first 5G global specifications defined in 2018 by 3GPP (3rd Generation Partnership Project), an industry standards development organization, initial commercial 5G network deployments and device launches, which focus on enhanced mobile broadband services, began in 2019 and will continue into [removed: 2020] [added: 2021] and beyond.

[added: With support for multi-gigabit data rates, low latency and greater capacity,] 5G [removed: is designed to enhance] [added: enhances] mobile broadband services, including ultra-high definition (4K) video [removed: streaming, near-instant] [added: streaming and sharing, near-instantaneous] access to cloud [removed: services and augmented and virtual reality applications, with lower latency and multi-gigabit user data speeds, and bring more capacity] [added: services, multi-player cloud gaming] and [removed: efficiency to networks, which may enable operators to offer new unlimited mobile data plans.][added: AR/VR/XR (augmented reality/virtual reality/extended reality) applications.]

[removed: Looking ahead, we expect future releases of] [added: We believe] 5G [removed: to expand to new industries beyond traditional cellular communications and to create new business models and services, such as autonomous vehicles and] [added: will also enable] artificial intelligence-based platforms designed to bring greater autonomy [added: and wireless connectivity] to [added: factory automation for more reconfigurable] manufacturing and other industrial applications (known as industrial [removed: IoT),] [added: IoT)] through ultra-reliable, ultra-low latency communication links.

[added: We also expect 5G to connect a significant number of “things” (also known as IoT), including among others, consumer, enterprise, retail, wearable and voice and music devices, with] connectivity designed to meet diverse (low) power and cost requirements, as well as to address both [removed: low] [added: low-] and [removed: high complexity] [added: high-complexity] applications.

Most 5G devices [removed: are expected to] include multimode support for 3G, 4G and Wi-Fi, enabling service continuity where 5G has yet to be deployed and simultaneous connectivity across 4G technology, while also allowing mobile operators to utilize current network deployments.

At the same time, 4G is expected to continue to evolve in parallel with the further development of 5G and become fundamental to many of the key 5G technologies (through [removed: multi-connectivity) in areas] [added: multi-connectivity),] such as [added: 5G massive IoT leveraging LTE IoT,] support for unlicensed [removed: spectrum,] [added: spectrum and] gigabit LTE user data [removed: speeds and LTE IoT that meets low power and cost requirements.][added: speeds.]

The first phase of 5G networks [added: predominantly] supports mobile broadband services for [removed: the smartphone form factor] [added: smartphones,] both in lower spectrum bands below [removed: 6] [added: 7] GHz [removed: (sub-6), as well] [added: (commonly referred to] as [added: sub-6, sub-7 or Frequency Range 1) and in] higher bands above [removed: 6 GHz, including] [added: 24 GHz (commonly referred to as] millimeter wave [removed: (mmWave).][added: (mmWave) or Frequency Range 2).]

As with previous generations of mobile networks, it will take time to deploy new [removed: 5G networks.]

Consumer demand in smartphones. From October [removed: 2018] [added: 2019] through September [removed: 2019,] [added: 2020,] approximately [removed: 1.4] [added: 1.2] billion smartphones are estimated to have shipped globally, representing a year-over-year decrease of approximately [removed: 4%] [added: 9% primarily driven by the global spread of the coronavirus (COVID-19) pandemic, which negatively impacted consumer demand for smartphones and replacement rates] (IDC, Mobile Phone Tracker, [removed: 2019Q3).][added: 2020Q2).]

[removed: Smartphone shipments in calendar] [added: Calendar year] 2020 [added: 5G global smartphone shipments] are expected to [removed: be approximately flat year-over-year (IDC Quarterly] [added: reach more than 200 million units (IDC,] Mobile Phone Tracker, [removed: 2019Q3).][added: 2020Q2).]

Consumer demand for new types of experiences, combined with the needs of mobile operators and device manufacturers to provide differentiated features and services, is driving continued innovation within the [removed: smartphone.][added: smartphone industry, across connectivity, processing, AI, multimedia, imaging, audio and more.]

As a result, the smartphone [removed: has become] [added: continues to be] the go-to device for social networking, music and video streaming, gaming, email and web browsing, among others.

Transforming other industries. With their significant scale and highly integrated solutions, industries beyond mobile, including [removed: automotive, computing, IoT] [added: automotive] and [removed: networking,] [added: IoT,] among others, are leveraging the same technology innovations found in today’s leading smartphones to enhance existing products and services as well as to create new products and services.

Our inventions that contribute to the formation of advanced cellular technologies, such as [removed: 3G/4G] [added: 3G, 4G] and now 5G connectivity, are helping to drive, and in the case of 5G accelerate the pace of, this transformation.

For example, in the automotive industry, approximately [removed: 72%] [added: 70%] of new vehicles produced [added: in 2025] are projected to have cellular [removed: connectivity by 2025,] [added: connectivity,] compared to [removed: 40%] [added: 48%] in [removed: 2018] [added: 2019] (Strategy Analytics, October [removed: 2019).][added: 2020).]

In addition, the installed base of non-mobile devices with cellular connectivity, which includes IoT devices among others, is projected to grow [removed: more than 150%] [added: 190%] between [removed: 2019] [added: 2020] and [removed: 2023] [added: 2024] (ABI Research, [removed: February 2019).][added: October 2020).]

The [removed: growth] [added: demand] in the use of wireless devices worldwide and the demand for data services and applications requires continuous innovation to improve the user experience, support new services, increase network capacity, make use of different frequency bands and allow for dense network deployments.

[removed: For nearly three decades, we] [added: We] have [removed: invested] [added: a long history of] heavily [added: investing] in research and development and have developed foundational technologies that drive the continued evolution of the wireless industry, including CDMA and OFDMA.

*TDMA-based.* [removed: TDMA (Time Division Multiple Access)-based] [added: TDMA-based] technologies are characterized by their access method allowing several users to share the same frequency channel by dividing the signal into different time slots.

Most of these systems are classified as 2G [removed: (second generation)] technology.

The transition of wireless devices from 2G to 3G/4G and the [removed: emergence] [added: deployment] of 5G technologies continued around the world with estimated 3G/4G/5G connections up [removed: 11%] [added: 7%] year-over-year (GSMA Intelligence, November [removed: 2019).][added: 2020).]

As of September 30, [removed: 2019,] [added: 2020,] there were approximately [removed: 1.9] [added: 1.6] billion GSM connections worldwide, representing approximately [removed: 24%] [added: 20%] of total cellular connections, down from [removed: 30%] [added: 25%] as of September 30, [removed: 2018] [added: 2019] (GSMA Intelligence, November [removed: 2019).][added: 2020).]

We have also developed other

3G networks, first launched in the early 2000s, ushered in the mobile broadband era, serving as a true alternative to traditional desktop internet service, allowing users to experience the internet from virtually anywhere.

The combination of faster processing and larger screens with mobile broadband connectivity has transformed how people interact with information and with each other.

The launch of 4G in 2010 brought true mobile broadband connectivity to wireless networks.

With its faster data rates and greater capacity, 4G has become the foundational technology to many of the applications and services used today, including e-commerce, video streaming, video calling, social media and gaming.

3G and 4G mobile broadband technologies have also helped to strengthen economic and social development globally by providing access to government and healthcare resources and creating new educational and entrepreneurial opportunities.

As of September 30, 2020, more than 110 operators have deployed 5G commercial networks in nearly 50 countries and territories, and over 400 operators are investing in 5G (GSA, October 2020).

5G also brings more capacity and efficiency to cellular networks, which may enable operators to reduce their operating costs and offer new unlimited mobile data plans.

The second 5G global specifications defined in 2020 by 3GPP (Release 16) and future releases of 5G are expected to expand the reach of the technology to industries beyond mobile to create new services, business models and experiences, such as automated driving built on the concepts of computer vision, sensor fusion and vehicle-to-vehicle communications.

5G networks; however, we expect that deployment of 5G networks will be at a faster pace as compared to the transition from 3G to 4G technologies.

Smartphone shipments in calendar 2021 are expected to increase by approximately 9% year-over-year (IDC Quarterly Mobile Phone Tracker, 2020Q2), reflecting a gradual recovery in demand for smartphones and replacement rates from the negative effects of the COVID-19 pandemic.

Looking beyond 2021, we expect replacement rates to moderately lengthen when compared to pre-COVID-19 levels, particularly in developed regions and China, as consumer demand is increasingly driven by new product launches and/or innovation cycles.

It is expected that the evolution of 5G will fuel further innovation within the smartphone industry to support more intuitive and immersive experiences.

The main example of TDMA-based technologies is GSM (Global System for Mobile Communications).

We continue to play a significant role in the further development of LTE-based technologies, such as Narrowband IoT (NB-IoT), enhanced Machine Type Communications (eMTC) and Enhanced TV broadcast (EnTV), in addition to the core LTE operation evolution, such as enhancements for mobility and massive multiple-input multiple-output (MIMO) operation.

LAA is a key technology for many operators with limited licensed spectrum to deliver Gigabit LTE speeds.

- eLAA (enhanced LAA), introduced as part of 3GPP Release 14, is an evolution of LAA.

Initial commercial 5G network deployments and device launches began in calendar 2019 and continued throughout 2020.

Many of our inventions at the core of 3G and 4G serve as foundational technologies for 5G.

(compared to LTE’s 20 MHz maximum bandwidth, which requires carrier aggregation to combine spectrum beyond 20 MHz).

5G is the first generation of cellular wireless communication systems to use transmissions at mmWave bands, which creates certain challenges including coverage limitations and blockages, heightened costs and power constraints.

In order to address these challenges, we have been a leader in designing RFFE modules and RF filter products that use adaptive beamforming (which spatially concentrates radio energy in a given beam direction to extend the range) and that enable the efficient tracking and switching of beams in accordance with varying radio conditions.

mmWave deployments rely on small cells (low-powered cellular base stations typically used for increased system capacity and which may have already incorporated Gigabit LTE) to allow for faster, more reliable mobile service with transmissions at mmWave bands.

Release 16 not only introduced enhancements to 5G mobile broadband experiences (e.g., more capacity, improved coverage, mobility and better device power efficiency), but also expanded 5G technologies into new use cases and industries.

For example, to better enable new industrial IoT use cases, such as factory automation and other mission critical applications, Release 16 added support for private 5G networks, efficient wireless Ethernet over 5G, 5G Time-Sensitive Networking (TSN) and further enhanced ultra-reliable low latency communications.

Release 16 also fulfilled the 5G vision of supporting different spectrum types by expanding 5G into unlicensed spectrum with 5G NR Unlicensed (NR-U).

Release 16 NR-U focused on sub-7GHz operation, specifically 5GHz and 6GHz bands, and Release 17 will expand NR-U to support higher bands such as 60 GHz.

High-precision positioning was another focus area in Release 16.

Accurate device positioning is a key enabler for many applications, such as public safety and indoor navigation.

Release 16 added new capabilities for 5G positioning, supporting techniques such as multi-cell roundtrip time, angle of arrival/departure and time difference of arrival.

Release 16 addressed the growing needs of low-power, wide-area IoT use cases by allowing in-band deployments of NB-IoT and eMTC in 5G carriers, as well as supporting these low-complexity IoT technologies with the new 5G core network.

Additionally, to make mmWave densification more cost efficient, Release 16 introduced integrated access and backhaul that allows a base station to provide both wireless access for devices and wireless backhaul connectivity, thereby eliminating the need for a wired backhaul.

Amendments of the 802.11 standard are commonly referred to by the names made popular by the Wi-Fi Alliance (for example, 802.11ax is known as Wi-Fi 6).

Up to 1200MHz of new spectrum has been added in the 6GHz band in the United States, which triples the available spectrum for Wi-Fi, which can be used by new Wi-Fi 6 extended devices.

802.11ah targets sub-1 GHz spectrum.

In 3GPP Release 16, we led the standardization of many 4G and 5G-based positioning capabilities.

- on-device AI features, including machine learning platforms and the application of AI and machine learning techniques to edge computing and other use cases;

- fast charging features, enabling devices to charge quickly, safely and efficiently;

- System on Chip (SoC) architecture, low-power computing and other optimization techniques.

| | | | | | | | | | | | | | | | | | |

Companies in the mobile industry generally recognize that any company

3G/4G multimode mobile broadband continues to be an important platform for extending the reach and potential of the Internet.

This is amplified in emerging regions and China, where, as of September 30, 2019, 3G/4G mobile broadband connections are estimated to be approximately seven times the number of fixed Internet household connections (GSMA Intelligence November 2019 and PT June 2019).

In China, 3G/4G multimode services have experienced strong adoption since being launched in 2013, with more than 1.4 billion connections estimated as of September 30, 2019 (GSMA Intelligence, November 2019).

In India, mobile operators continue to expand their 3G/4G multimode services, providing consumers with the benefits of advanced mobile broadband connectivity while creating new opportunities for device manufacturers and other members of the mobile ecosystem.

3G/4G mobile broadband may be the first and, in many cases, the only way that people in these regions access the Internet.

The transition of wireless networks and devices to 3G/4G has not only been driven by the number of affordable handsets available in emerging regions and China, but also by the variety of flexible and affordable data plans being offered by mobile operators.

We also expect 5G will enable connecting a significant number of “things” (also known as IoT, including the connected home, smart cities, wearables and voice and music devices), with

The slow-down in smartphone demand that began in the year ended September 2019, and that is expected to continue into calendar 2020, reflects further lengthening of replacement cycles, particularly in developed regions and China, where consumer demand is increasingly driven by new product launches and/or innovation cycles as the industry transitions to 5G.

It is expected that 5G connectivity will drive further innovations within the smartphone and offer enhanced connectivity, which in turn will enable new applications.

Given its advanced capabilities and utility, the smartphone has replaced many traditional consumer electronic devices, including digital cameras, video cameras, standalone GPS units, gaming devices and music players.

The main examples of TDMA-based technologies are GSM (deployed worldwide), IS-136 (deployed in the Americas) and Personal Digital Cellular (PDC) (deployed in Japan).

To date, these technologies have seen many revisions.

New specifications continue to be defined by 3GPP.

CDMA technologies ushered in a significant increase in mobile broadband data services.

We continue to play a significant role in the development of LTE, LTE Advanced and LTE Advanced Pro, which are the predominant 4G technologies currently in use.

| | |

| --- | --- |

As of October 2019, approximately 900 wireless operators have commercially deployed or started testing LTE networks and 777 operators have commercially launched LTE in 228 countries, including 308 operators in 135 countries having commercially launched LTE Advanced networks (GSA, November 2019).

As of October 2019, 258 wireless operators in 94 countries have demonstrated, are testing, trialing or have been licensed to begin field trials of 5G-enabling and candidate technologies, and an additional 69 wireless operators in 50 countries have announced their intentions to make 5G available to their customers by 2022 (GSA, November 2019).

802.11ah was finalized in early 2017 and targets sub-1 GHz spectrum and is expected to be a solution for “connected home” applications that require long battery life.

and indoor areas); and third-party inertial sensors.

| • | RFFE chips and modules (including power amplifier modules, envelope tracker, antenna tuners, diversity modules, RF switches and micro-acoustic RF filters) designed for improved signal performance and reduced power consumption, while simplifying the design for manufacturers to develop LTE/5G multimode, multiband devices, including sub-6 GHz and mmWave devices; |

- on-device artificial intelligence (AI) features, including machine learning platforms;

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

architecture and are designed to deliver high levels of compute performance at low power.

As a

These relationships may affect customers’ decisions to purchase products or license technology from us.

Accordingly, new competitors or alliances among competitors could emerge and rapidly acquire significant market positions to our detriment.

than 300 licensees.

We have also informed standards bodies that we hold patents and pending patent applications that are potentially essential for LTE standards, including FDD and TDD versions and have committed to offer to license our essential patents for these LTE standards consistent with our commitments to those bodies.

We have informed standards bodies that we hold patents and pending patent applications that are essential for 5G technologies and have committed to offer to license our essential patents for these 5G standards consistent with our commitments to those bodies.

circuits business.

Commitments and Contingencies.”

During fiscal 2019, we completed the sale of our mobile health nonreportable segment, and we combined our Small Cells nonreportable segment into our QCT segment.

Prior period segment information has not been adjusted to conform to the new segment presentation as such adjustments are insignificant.

Cost Plan

In the second quarter of fiscal 2018, we announced a Cost Plan designed to align our cost structure to our long-term margin targets.

As part of this plan, we initiated a series of targeted actions across our businesses with the objective to reduce annual costs by $1 billion, excluding incremental costs resulting from any future acquisition of a business.

Commitments and Contingencies.” We are also engaged in numerous other legal actions arising in the ordinary course of our business [added: (such as, for example, proceedings relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights)] and, while there can be no assurance, we believe that the ultimate outcome of these other legal actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows.

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | | [added: | | | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended September 29, 2019][added: ended September 27, 2020]

| ☐ | | [added: | | | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission File [removed: Number 0-19528][added: Number 0-19528]

| | [added: | |] Delaware | | | | [added: | | | | | | | |] 95-3685934 | [added: | |]

| | [added: | |] (State or Other Jurisdiction of Incorporation or Organization) | | | | [added: | | | | | | | |] (I.R.S. [removed: Employer Identification] [added: Employer Identification] No.) | [added: | |]

| | [added: | |] 5775 Morehouse Dr., | [added: | |] San Diego, | [added: | |] California | | [added: | | | |] 92121-1714 | [added: | |]

| | [added: | |] (Address of Principal Executive Offices) | | | | [added: | | | | | | | |] (Zip Code) | [added: | |]

[removed: (858) 587-1121][added: (858) 587-1121]

| Title of Each Class | [added: | |] Trading Symbol(s) | [added: | |] Name of Each Exchange on Which Registered | [added: | |]

| Common stock, $0.0001 par value | [added: | |] QCOM | [added: | |] NASDAQ Stock Market | [added: | |]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |] Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at March [removed: 29, 2019] [added: 27, 2020] (the last business day of the registrant’s most recently completed second fiscal quarter) was [removed: $69,171,646,680,] [added: $74.9 billion,] based upon the closing price of the registrant’s common stock on that date as reported on the NASDAQ Global Select Market.

The number of shares outstanding of the registrant’s common stock was [removed: 1,141,844,863] [added: 1,131 million] at November [removed: 4, 2019.][added: 2, 2020.]

Portions of the registrant’s Definitive Proxy Statement in connection with the registrant’s [removed: 2020] [added: 2021] Annual Meeting of Stockholders, to be filed with the Commission subsequent to the date hereof pursuant to Regulation 14A, are incorporated by reference into Part III of this Report.

| QUALCOMM Incorporated | | [added: | | | |]

| Form 10-K | | [added: | | | |]

| For the Fiscal Year Ended September [removed: 29, 2019] [added: 27, 2020] | | [added: | | | |]

| Index | | [added: | | | |]

| | | [added: | | | |] Page | [added: | |]

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| [Item [removed: 9A.](#s09EE843D8CE3545083790B8489850ABD)] [added: 9A.](#ice2221d47b634383a22ce3c4c6fc1587_136)] | [added: | |] [Controls and [removed: Procedures](#s09EE843D8CE3545083790B8489850ABD)] [added: Procedures](#ice2221d47b634383a22ce3c4c6fc1587_136)] | [removed: [59](#s09EE843D8CE3545083790B8489850ABD)] | [added: | [51](#ice2221d47b634383a22ce3c4c6fc1587_136) | | |]

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| [removed: [PART III](#sA36DAD323C2453478BC3F4B014082631)] [added: [PART III](#ice2221d47b634383a22ce3c4c6fc1587_142)] | | | [added: | | | | | |]

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| [Item [removed: 12.](#sEB885BB9AA5F519183F592247C1C5291)] [added: 12.](#ice2221d47b634383a22ce3c4c6fc1587_151)] | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sEB885BB9AA5F519183F592247C1C5291)] [added: Matters](#ice2221d47b634383a22ce3c4c6fc1587_151)] | [removed: [61](#sEB885BB9AA5F519183F592247C1C5291)] | [added: | [53](#ice2221d47b634383a22ce3c4c6fc1587_151) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of

the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.

7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [PART II](#ice2221d47b634383a22ce3c4c6fc1587_79) | | | | | | | | |

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| [PART IV](#ice2221d47b634383a22ce3c4c6fc1587_160) | | | | | | | | |

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Additionally, statements concerning future matters such as our future business, prospects, results of operations, financial condition or research and development or technology investments; new or enhanced products, services or technologies; emerging industries or business models; design wins or product launches; industry, market or technology trends, dynamics or transitions, such as the transition to 5G; potential impacts of the COVID-19 pandemic, legal or regulatory matters, U.S./China trade or national security tensions, vertical integration by our customers or competition; and other statements regarding matters that are not historical are also forward-looking statements.

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| [PART I](#sE8B84F0FE71253FBA08B63E90319B5D9) | | |

| [PART II](#s3E422EE01C4B5B679F7FA08AAC07449F) | | |

| [PART IV](#sF93B41A279E759DFAD48003569413A5A) | | |

Additionally, statements concerning future matters such as the development of new products, enhancements or technologies, industry and market trends, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Annual Report.

At September [removed: 29, 2019,] [added: 27, 2020,] we occupied the following facilities (square footage in millions):

| | [added: | |] United States | | | [added: | | |] Other Countries | | | [added: | | |] Total | | [added: |]

| Owned facilities | [added: | |] 4.4 | | | [added: | | |] 0.4 | | | [added: | | |] 4.8 | | [added: |]

| Leased facilities | [added: | |] 0.9 | | | [removed: 5.3] | | | 6.2 | | [added: | | | | 7.1 | | |]

Our headquarters [removed: as well as] [added: and] certain research and development, manufacturing and network management hub operations are located in San Diego, California.

[removed: Our QCT segment] [added: We] also [removed: operates] [added: operate] leased manufacturing facilities in Germany, China and Singapore.

We also own and lease properties around the world for use as sales and administrative offices and research and development centers, primarily in the United [removed: States] [added: States, India] and [removed: India.][added: China.]

Several other owned and leased facilities are under construction totaling approximately [removed: 1.3 million] [added: 750 thousand] additional square feet, primarily related to the construction of new facilities in India and [removed: a new manufacturing facility in Singapore.][added: Taiwan.]

[added: Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the “Liquidity and Capital Resources” section under the heading “Additional Capital Requirements.”] Additional information on net property, plant and equipment by geography is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 8.

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| Total | | | 5.3 | | | | | | 6.6 | | | | | | 11.9 | | |

In response to the COVID-19 pandemic, we modified certain of our workforce practices, such as having the vast majority of our employees work from home.

Such changes have impacted the physical utilization of certain of our non-manufacturing facilities; however, we believe that collectively our facilities are suitable and adequate for our present purposes.

We continue to assess the impacts of COVID-19 on the suitability, adequacy, productive capacity and utilization of our existing principal physical properties, and we are in the process of evaluating the future state of our workforce practices, which may result in changes to our physical property needs.

Additional information on our additional capital requirements is provided in this Annual Report in “Part II, Item 7.

Segment Information.”

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| Total | 5.3 | | | 5.7 | | | 11.0 | |

We believe that our facilities are suitable and adequate for our present purposes and that the productive capacity in facilities that are not under construction is substantially utilized.

Segment Information.” In the future, we may need to purchase, build or lease additional facilities to meet the requirements projected in our long-term business plan.

Our common stock is traded on the NASDAQ Global Select Market (NASDAQ) under the symbol “QCOM.” At November [removed: 4, 2019,] [added: 2, 2020,] there were [removed: 6,683] [added: 6,609] holders of record of our common stock.

Future dividends may be affected by, among other items, our views on potential future capital [added: availability and] requirements, including those relating to research and development, creation and expansion of sales and distribution channels, investments and acquisitions, legal risks, withholding of payments by one or more of our significant licensees and/or customers, fines by government agencies and/or adverse rulings by a court or arbitrator in a legal matter, stock repurchase programs, debt issuances, changes in federal and state income tax [removed: law] [added: law, trade and/or national security protection policies, volatility in economies] and [added: financial markets globally, including as impacted by the COVID-19 pandemic, and] changes to our business model.

Our 2016 Long-Term Incentive Plan (2016 Plan) provides for the grant of [removed: both] incentive and nonstatutory stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance units, performance shares, deferred compensation awards and other stock-based awards.

[removed: Restricted] [added: We primarily grant restricted] stock [removed: units] [added: units, which] generally vest over periods of three years from the date of grant.

[removed: The] [added: Our] Board of Directors may amend or terminate the 2016 Plan at any time, with certain amendments also requiring stockholder approval.

Additional information regarding our share-based compensation plans and plan activity for fiscal [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 5.

[removed: | (2) | On July 26, 2018, we announced a repurchase program authorizing us to repurchase up to $30 billion of our common stock. At September 29, 2019, $7.1 billion remained authorized for repurchase. The stock repurchase program has no expiration date. Since September 29, 2019, we repurchased and retired 3.9 million shares of common stock for $300 million.] Shares withheld to satisfy statutory tax withholding requirements related to the vesting of share-based awards are not issued or considered stock repurchases under our stock repurchase [removed: program and, therefore, are excluded from the table above. |][added: program.]

On July 26, 2018, we announced a repurchase program authorizing us to repurchase up to $30 billion of our common stock.

We did not repurchase any of our shares in the fourth quarter of fiscal 2020.

At September 27, 2020, $4.6 billion remained authorized for repurchase.

In the first quarter of fiscal 2021, we resumed stock repurchases under the stock repurchase program, which we had suspended in the third quarter of fiscal 2020 in light of COVID-19 to maintain our financial liquidity position and flexibility.

The stock repurchase program has no expiration date.

Stock options vest over periods not exceeding five years and are exercisable for up to ten years from the grant date.

Issuer purchases of equity securities during the fourth quarter of fiscal 2019 were:

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| | Total Number of Shares Purchased | | | Average Price Paid Per Share (1) | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | | |

| | (In thousands) | | | | | | | (In thousands) | | | (In millions) | | |

| July 1, 2019 to July 28, 2019 | 2,368 | | | $ | 76.01 | | | 2,368 | | | $ | 7,589 | |

| July 29, 2019 to August 25, 2019 | 2,502 | | | 71.94 | | | | 2,502 | | | 7,409 | | |

| August 26, 2019 to September 29, 2019 | | | | | | | | | | | | | |

| Other repurchases | 4,489 | | | 77.07 | | | | 4,489 | | | 7,063 | | |

| Accelerated share repurchases (3) | 68,682 | | | | | | | 68,682 | | | 7,063 | | |

| Total | 78,041 | | | | | | | 78,041 | | | | | |

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| (1) | Average Price Paid Per Share excludes cash paid for commissions. |

| (3) | In September 2018, we entered into three accelerated share repurchase agreements (ASR Agreements) to repurchase an aggregate of $16.0 billion of our common stock. During the fourth quarter of fiscal 2018, 178.4 million shares were initially delivered to us under the ASR Agreements and were retired. The ASR Agreements were completed during the fourth quarter of fiscal 2019, and an |

additional 68.7 million shares were delivered to us and were retired, comprising the final delivery of shares under the ASR Agreements.

In total, 247.1 million shares were delivered to us under the ASR Agreements at an average price per share of $64.76.

| | [added: | |] Years Ended (1) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | [added: | |] September [added: 27, 2020 | | | | | | September] 29, 2019 | | | | [added: | |] September 30, 2018 | | | | [added: | |] September 24, 2017 | | | | [removed: September 25, 2016] | | [removed: | |] September [removed: 27, 2015] [added: 25, 2016] | | |

| | [added: | |] (In millions, except per share data) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Revenues (2) | [added: | |] $ | [removed: 24,273] [added: 23,531] | | | [added: | |] $ | [removed: 22,611] [added: 24,273] | | | [added: | |] $ | [removed: 22,258] [added: 22,611] | | | [added: | |] $ | [removed: 23,554] [added: 22,258] | | | [added: | |] $ | [removed: 25,281] [added: 23,554] | |

| Operating income [added: (2)] | [added: | | 6,255 | | | | | |] 7,667 | | | | [added: | |] 621 | | | | [removed: 2,581] | | [added: 2,581] | | [removed: 6,495] | | | | [removed: 5,776] [added: 6,495] | | |

| Net income (loss) attributable to Qualcomm (2) | [added: | | 5,198 | | | | | |] 4,386 | | | | [removed: (4,964] | | [removed: )] [added: (4,964)] | | [removed: 2,445] | | | | [removed: 5,705] [added: 2,445] | | | | [removed: 5,271] | | [added: 5,705] | [added: | |]

| Per Share Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Basic earnings (loss) per share attributable to [removed: Qualcomm:] [added: Qualcomm] | [added: | | $ | 4.58 | | | | | $ |] 3.63 | | | | [removed: (3.39] | [added: $] | [removed: )] [added: (3.39)] | | [removed: 1.66] | | | [added: $] | [removed: 3.84] [added: 1.66] | | | | [removed: 3.26] | [added: $] | [added: 3.84] | [added: |]

| Diluted earnings (loss) per share attributable to [removed: Qualcomm:] [added: Qualcomm] | [added: | | 4.52 | | | | | |] 3.59 | | | | [removed: (3.39] | | [removed: )] [added: (3.39)] | | [removed: 1.64] | | | | [removed: 3.81] [added: 1.64] | | | | [removed: 3.22] | | [added: 3.81] | [added: | |]

| Dividends per share announced | [added: | | 2.54 | | | | | |] 2.48 | | | | [added: | |] 2.38 | | | | [removed: 2.20] | | [added: 2.20] | | [removed: 2.02] | | | | [removed: 1.80] [added: 2.02] | | |

| Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Cash, cash equivalents and marketable securities (3) | [added: | |] $ | [removed: 12,296] [added: 11,249] | | | [added: | |] $ | [removed: 12,123] [added: 12,296] | | | [added: | |] $ | [removed: 38,578] [added: 12,123] | | | [added: | |] $ | [removed: 32,350] [added: 38,578] | | | [added: | |] $ | [removed: 30,947] [added: 32,350] | |

| Total assets (3) | [added: | | 35,594 | | | | | |] 32,957 | | | | [added: | |] 32,718 | | | | [removed: 65,498] | | [added: 65,498] | | [removed: 52,359] | | | | [removed: 50,796] [added: 52,359] | | |

| Short-term debt (4) | [added: | | 500 | | | | | |] 2,496 | | | | [added: | |] 1,005 | | | | [removed: 2,495] | | [added: 2,495] | | [removed: 1,749] | | | | [removed: 1,000] [added: 1,749] | | |

| Long-term debt (5) | [added: | | 15,226 | | | | | |] 13,437 | | | | [added: | |] 15,365 | | | | [removed: 19,398] | | [added: 19,398] | | [removed: 10,008] | | | | [removed: 9,969] [added: 10,008] | | |

| Other long-term liabilities (6) | [added: | | 4,858 | | | | | |] 4,516 | | | | [added: | |] 3,537 | | | | [removed: 2,432] | | [added: 2,432] | | [removed: 895] | | | | [removed: 817] [added: 895] | | |

| Total stockholders’ equity (3) | [added: | | 6,077 | | | | | |] 4,909 | | | | [added: | |] 807 | | | | [removed: 30,725] | | [added: 30,725] | | [removed: 31,768] | | | | [removed: 31,414] [added: 31,768] | | |

[removed: | (1) | Our fiscal year ends on the last Sunday in September.] The fiscal [removed: year] [added: years] ended September [added: 27, 2020, September] 29, 2019, September 24, [removed: 2017,] [added: 2017 and] September 25, 2016 [removed: and September 27, 2015] each included 52 weeks. [removed: The fiscal year ended September 30, 2018 included 53 weeks. |]

[removed: | (2) | Revenues in fiscal 2019 included $4.7 billion resulting from the settlement with Apple and its contract manufacturers. Revenues in fiscal 2019 also reflected the impact of the adoption of the new revenue recognition guidance in the first quarter of fiscal 2019. Operating income in fiscal 2019 was impacted by a $275 million charge attributed to a fine imposed by the European Commission (EC) and $213 million in net charges related to our Cost Plan.] Additionally, net income for fiscal 2019 was impacted by a $2.5 billion charge to income tax expense resulting from the derecognition of a deferred tax asset related to the distributed intellectual property and a tax benefit of $570 million due to establishing new U.S. net deferred tax assets from making certain check-the-box elections. [removed: |]

Additionally, net loss for fiscal 2018 was impacted by [removed: the] [added: a] $5.7 billion charge related to the Tax Legislation.

Operating income was further impacted by $927 million and $778 million in charges related to the fines imposed by the Korea Fair Trade Commission and [added: the] TFTC, respectively.

[removed: | (3) | In the fourth quarter of fiscal 2018, we announced a stock repurchase program authorizing us to repurchase up to $30 billion of our common stock.] Under this program, we completed a tender offer and paid an aggregate of $5.1 billion to repurchase shares of our common stock and entered into three accelerated share repurchase agreements to repurchase an aggregate of $16.0 billion of our [removed: |][added: common stock, resulting in significant reductions to the balances of our cash, cash equivalents and marketable securities, total assets and total stockholders’ equity.]

[removed: | (4) | Short-term] [added: (4)Short-term] debt was comprised of outstanding commercial paper and, in fiscal 2019 and [removed: fiscal] 2017, the current portion of long-term debt. [removed: |]

[removed: | (5) | Long-term] [added: (5)Long-term] debt was comprised of floating- and fixed-rate notes. [removed: |]

[removed: | (6) | Other] [added: (6)Other] long-term liabilities in this balance sheet data includes [removed: non-current] [added: noncurrent] income taxes payable and [added: noncurrent liabilities for uncertain tax positions and] excludes unearned revenues. [removed: |]

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(1)Our fiscal year ends on the last Sunday in September.

The fiscal year ended September 30, 2018 included 53 weeks.

(2)Revenues in fiscal 2020 included $1.8 billion resulting from the settlement with Huawei.

Net income for fiscal 2020 was impacted by $405 million in non-marketable investment impairments.

Revenues in fiscal 2019 included $4.7 billion resulting from the settlement with Apple and its contract manufacturers.

Revenues in fiscal 2019 also reflected the impact of the adoption of the new revenue recognition guidance in the first quarter of fiscal 2019.

Operating income in fiscal 2019 was impacted by a $275 million charge attributed to a fine imposed by the European Commission (EC) and $213 million in net charges related to our cost plan that concluded in fiscal 2019 (Cost Plan).

(3)In the fourth quarter of fiscal 2018, we announced a stock repurchase program authorizing us to repurchase up to $30 billion of our common stock.

We have revised our prior period financial statements for the years ended September 30, 2018 and September 24, 2017 to reflect the correction of an immaterial error as described in this Annual Report in Notes to Consolidated Financial Statements, “Note 1.

Significant Accounting Policies” and “Note 12.

Revision of Prior Period Financial Statements.”

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common stock, resulting in significant reductions to the balances of our cash, cash equivalents and marketable securities, total assets and total stockholders’ equity.

Our consolidated financial statements at September [removed: 29, 2019] [added: 27, 2020] and September [removed: 30, 2018] [added: 29, 2019] and for each of the three years in the period ended September [removed: 29, 2019] [added: 27, 2020] and the Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, are included in this Annual Report on pages F-1 through [removed: F-44.][added: F-37.]

Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in *Internal Control — Integrated Framework (2013)* [added: issued by the Committee of Sponsoring Organizations of the Treadway Commission.]

Based on our evaluation under this framework, our management concluded that our internal control over financial reporting was effective as of September [removed: 29, 2019.][added: 27, 2020.]

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report, has also audited the effectiveness of our internal control over financial reporting as of September [removed: 29, 2019,] [added: 27, 2020,] as stated in its report which appears on pages F-1 through [removed: F-4] [added: F-3] in this Annual Report.

[removed: | i. | pertain] [added: i.pertain] to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; [removed: |]

[removed: | ii. | provide] [added: ii.provide] reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and [removed: |]

[removed: | iii. | provide] [added: iii.provide] reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. [removed: |]

There were no changes in our internal control over financial reporting during the fourth quarter of fiscal [removed: 2019] [added: 2020] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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The information required by this item regarding directors is incorporated by reference to our [removed: 2020] [added: 2021] Proxy Statement to be filed with the SEC in connection with our [removed: 2020] [added: 2021] Annual Meeting of Stockholders [removed: (2020] [added: (2021] Proxy Statement) in “Proposal 1: Election of Directors” under the [removed: heading] [added: subheading] “Nominees for Election.” Certain information required by this item regarding executive officers is set forth in Item 1 of Part I of this Report under the heading [removed: “Executive] [added: “Information about our Executive] Officers.” The information required by this item regarding corporate governance is incorporated by reference to our [removed: 2020] [added: 2021] Proxy Statement in the section titled “Corporate Governance” under the headings “Code of Ethics and Corporate Governance Principles and [removed: Practices,”] [added: Practices” and] “Board Meetings, Committees and [removed: Attendance” and “Director Nominations.”][added: Attendance.”]

The information required by this item is incorporated by reference to our [removed: 2020] [added: 2021] Proxy Statement in the sections titled [removed: “HR and Compensation Committee Report,”] “Executive Compensation and Related [removed: Information”] [added: Information,” “HR] and [added: Compensation Committee Report” and] “Director Compensation,” and in the section titled “Stock Ownership of Certain Beneficial Owners and Management” under the [removed: heading] [added: subheading] “Compensation Committee Interlocks and Insider Participation.”

The information required by this item is incorporated by reference to our [removed: 2020] [added: 2021] Proxy Statement in the section titled “Stock Ownership of Certain Beneficial Owners and [removed: Management,” and in “Proposal 3”] [added: Management” including] under the [removed: heading] [added: subheading] “Equity Compensation Plan Information.”