Thursday, 22 June, 2017

Qualcomm sues four Apple contract manufacturers

Intel backs FTC on alligations against Qualcomm Qualcomm files case against Apple iPhone manufacturers
Devin Neal | 18 May, 2017, 01:03

Qualcomm has filed a lawsuit against the main manufacturers of iPhones and iPads, saying they have failed to pay licensing fees on behalf of Apple.

The chip maker stated in the complaint that since the start of 2017 "Apple has interfered with Defendants' long-standing payment obligations to Qualcomm".

Qualcomm had said last month Apple had instructed its suppliers not to pay Qualcomm the royalties Qualcomm believes it is entitled to for use of its intellectual property in the iPhone, which caused Qualcomm to slash its financial forecast.

Qualcomm, in its counterclaims to Apple's suit, accused Apple of unlawfully interfering with its agreements with contract manufacturers and of encouraging worldwide regulators to attack it. "The manufacturers must continue to live up to their obligations under these agreements and Apple should immediately cease its tortious interference".

Qualcomm's shares were marginally lower at $55.82 in midday trading, while Apple's shares fell 2.3 percent to $151.85.

The case underscores the influence Apple wields over the companies that make its products and parts for them.

Even Samsung is on Apple's side, but Qualcomm isn't giving up ...

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Qualcomm's patent-licensing segment in fiscal 2016 contributed roughly 80% of its pretax profit. "You are responsible for paying that".

Last week, Bloomberg reported Qualcomm would ask the U.S. International Trade Commission to issue an injunction prohibiting iPhone imports, citing sources familiar with the company's plans. While it is not unusual for the companies and other organizations to make such filings, for the briefs to be filed at such an early stage in the process shows the interest the case is garnering in the tech community.

Qualcomm has accused Apple of "strong arming" the contract manufacturers to stop paying the licensing fees they legally owe Qualcomm, which is a breach of the contract between Qualcomm and the manufacturers.

"We are suing to get our money", Rosenberg said.

In addition to being one of the world's largest maker of chips for mobile devices, Qualcomm owns thousands of patents on fundamental technology that ensures all phones work. He likened the resistance to pay for the use of Qualcomm technology to someone walking into an Apple store and refusing to pay full price for a smartphone.

Qualcomm said in the complaint that Apple is trying to force the company to agree to a "unreasonable demand for a below-market direct license". Apple filed its suit in California in January.

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