As Smartphone Power Struggle Heats Up, Qualcomm Countersues Apple

In relation to a dispute over licensing fees for mobile technology, chipmaker Qualcomm is countersuing Apple Inc in a time frame of less than three months after being sued by the iPhone maker for $1 billion.

Seeking to “enjoin Apple from further interference with Qualcomm’s agreements with the companies that manufacture iPhones and iPads for Apple” and unspecified damages, it has already filed its answers and counterclaims to the suit, Qualcomm said.

Between the world’s most valuable company and the leading maker of processors in mobile phones, the legal battle is the centerpiece of a high-stakes dispute. In addition to royalties when any device is sold that’s based on its cellular standards, Qualcomm makes money from the chips themselves as well. It is noteworthy that licensing accounts for one-third of Qualcomm’s revenues.

Qualcomm has been charging royalties for “technologies they have nothing to do with”, Apple had claimed in January.

How Apple threatened Qualcomm to keep it from speaking publicly about the better performance of iPhones with Qualcomm chips, encouraged regulatory attacks against Qualcomm around the world, opted “not to utilize the full performance of Qualcomm’s modem chips in its iPhone7,” breached and mischaracterized agreements and negotiations and interfered with agreements with device manufacturers have been outlined in the countersuit, Qualcomm said in its press release.

“Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90 percent of smartphone profits, without relying upon Qualcomm’s fundamental cellular technologies,” Qualcomm said. “Now, after a decade of historic growth, Apple refuses to acknowledge the well established and continuing value of those technologies.”

After Apple helped the Korean authorities in an antitrust investigation, Qualcomm withheld nearly $1 billion from Apple as a retaliatory measure and this is part of the initial claim by Apple. Rebates from the chipmaker for exclusive use of its products is included in Apple’s business agreement with Qualcomm.

He prefers the matter to be settled out of court and that, “you’re probably not going to see us argue this out in press,” Qualcomm CEO Steven Mollenkopf said in February at a Goldman Sachs conference in San Francisco.

The suit was filed in the U.S. District Court for the Southern District of California.

(Adapted from CNBC)


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