Apple, Qualcomm Spat intensifies, Manufacturers Drawn In

Geronimo Vena
Mag 18, 2017

The lawsuit was filed Wednesday in a US federal district court against iPhone manufacturers Pegatron, Foxconn Technology, Wistron, and Compal Electronics for infringing patent-licensing agreements with Qualcomm.

According to a recent Qualcomm announcement, the company has revealed that they have since filed lawsuits against the likes of Foxconn, Compal, Wistron, and Pegatron, who for those unfamiliar are the contract manufacturers hired by Apple to help build the iPhone.

Qualcomm noted that Apple agreed to indemnify its manufacturers for any damages they may incur as a result of breaching their agreements with Qualcomm.

Qualcomm said it sought an order that would require the manufacturers to comply with their long-standing contractual obligations to the company, as well as declaratory relief and damages. Apple has now unilaterally declared the contract terms unacceptable; the same terms that have applied to iPhones and cellular-enabled iPads for a decade.

Stuttgart prosecutors said Wednesday they're investigating whether Volkswagen chief executive Matthias Müller and two others, including Müller's predecessor, manipulated markets by not releasing information about the German company's diesel cheating soon enough.

While stopping short of disclosing the monetary value of royalties owed to it by Apple's above mentioned manufacturing partners, Qualcomm has already slashed its profit forecasts for the first-quarter, and has specifically excluded any revenue that would have otherwise come from Apple's partners.

Apple has said it will suspend royalty payments "until the correct amount can be determined by the court".

Porsche Holding said in a statement that "we are convinced that we have duly fulfilled our capital market disclosure requirements". That means Qualcomm can collect money on every smartphone, even those that have chips made by other companies.

This could get ugly, and Qualcomm might see some more 0s and 1s enter its accounts, real soon.

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

Apple argues that Qualcomm has overcharged it by "billions of dollars" over several years and that the mobile chipmaker has demanded "excessive royalties" in relation to its wireless communications patents. It's just the royalties on Apple products that aren't getting paid.

The case was filed in Qualcomm's hometown because the contracts establish that as the location for any disputes to be resolved, he said.

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