Qualcomm Sues Four of Apple’s Manufacturing Partners

Qualcomm's Quarterly Profit Plummets 40% Amid Apple Legal Battle

 

Qualcomm, Apple’s long-time supplier of baseband modem chips for the iPhone, has officially kicked its ongoing legal battle with the Silicon Valley tech-giant into overdrive this morning, when the chip-maker filed additional lawsuits against four of Apple’s iPhone manufacturing partners, according to a report published by Reuters.

Apple’s partners who have found themselves entangled in the mire of legal drama include Foxconn Technology Group, Pegatron Corp., Wistron Corp., and Compal Electronics Inc. — all of whom Qualcomm alleges have sided with Apple, adhering to the iPhone-maker’s instructions to not distribute royalties to the San Diego, California-based chip-maker.

“While not disputing their contractual obligations to pay for the use of Qualcomm’s inventions, the manufacturers say they must follow Apple’s instructions not to pay,” Qualcomm said in a statement on Wednesday.

These lawsuits against Apple’s contracted manufacturing partners are merely the latest in an ongoing spat of legal warfare between Qualcomm — one of the consumer electronics industry’s primary suppliers of baseband chips that enable mobile devices to connect to the internet — and Apple.

The saga began back in January of this year, when an Apple and U.S. Federal Trade Commission-backed injunction was filed against Qualcomm over the chip-maker’s alleged monopolistic tendencies, which included but were not limited to its overcharging Apple for royalties on baseband chips. The initial complaint was followed up by several suits filed on Apple’s behalf in various courts around the world, including one in Beijing, China, followed by another in the United Kingdom at the beginning of March.

The soap opera-styled courtroom battle intensified all the more late last month, when Apple made the abrupt decision to stop paying Qualcomm royalties on the modem chips used in its iPhone — a decision that became effective beginning the first quarter of 2017. The Cupertino-company, at that time, cited how it cannot pay royalties due Qualcomm while the ongoing legal battle was being waged between them; however the justification, in turn, set off a string of chain reactions that culminated in Qualcomm seeking an outright ban on iPhone imports into the U.S.

All of that leads us to where we are now, as Qualcomm, in its defense, is seeking “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.”

According to Qualcomm’s complaint, which was filed on Wednesday with the United States District Court for the Southern District of California, Apple — while it has yet to publicly comment on the latest litigation — has apparently agreed to compensate its manufacturing partners for any damages resulting from breaching their personal agreements with Qualcomm.

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.

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