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Apple Sues Qualcomm for Nearly $1 Billion Over Royalties

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After the U.S. Federal Trade Commission (FTC) earlier this week filed a lawsuit against Qualcomm, alleging unfair patent licensing practices, Apple has now sued their supplier for nearly $1 billion USD, reports CNBC.

Apple’s full statement is below:

“For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations. Qualcomm built its business on older, legacy, standards but reinforces its dominance through exclusionary tactics and excessive royalties. Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.

To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly $1B in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.

Apple believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.”

The iPhone maker says Qualcomm took “radical steps” to protect their scheme, such as “recently withholding nearly $1B in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them,” referring to Apple’s participation with South Korean antitrust regulators.

Last month, the South Korean agency slapped a $853 million fine on Qualcomm, alleging anticompetitive patent licensing business practices. Qualcomm has said it will fight the decision.

Screenshot 2017 01 20 13 25 31

Image of Qualcomm MDM9645M LTE Cat. 12 Modem in the iPhone 7 Plus (orange outline); via iFixit

The iPhone 7 Plus currently uses the following Qualcomm components, according to iFixit’s teardown:

  • Qualcomm MDM9645M LTE Cat. 12 Modem
  • Qualcomm PMD9645 Power Management IC
  • Qualcomm WTR4905 Multimode LTE Transceiver
  • Qualcomm WTR3925 RF Transceiver

Apple also stated “Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.”

This is going to be a lengthy court battle, as Apple takes on one of its suppliers. Grab the popcorn, folks.

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  • Tim

    I dunno… if they’re such s minor player go do business with someone else. At least that’s how it works on the ground, but I guess one can complain in the big leagues if they’ve agreed to a price and later don’t like it. Sounds ridiculous without knowing more.

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