Qualcomm Sues Apple Contract Manufacturers (reuters.com)

Qualcomm on Wednesday sued the manufacturers that make iPhones for Apple for failing to pay royalties on the chip maker's technology, widening its legal battle with the world's most valuable company. Qualcomm's lawsuit, filed Wednesday in a federal district court in San Diego, accuses Compal, Foxconn, Pegatron, and Wistron of breaching longstanding patent-licensing agreements with Qualcomm by halting royalty payments on Qualcomm technology used in iPhones and iPads. From a report: Apple sued Qualcomm in January, accusing it of overcharging for chips and refusing to pay some $1 billion in promised rebates. 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." Qualcomm said last month that Apple had decided to withhold royalty payments to its contract manufacturers that are owed to the chipmaker, for sales made in the first quarter of 2017, until the dispute is resolved in court. "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.

Comments

Why won't Qualcomm stop selling chips to Apple?

[known_coward_69]

Apple is playing hardball by not paying them. Hard to run a business with no money coming in.

Why can't Qualcomm simply refuse to sell to Apple until the lawsuit is done? Kind of hard to build iPhones with no radio chips in them. And I bet it's just as hard for Intel to ramp up production to cover the shortfall.

Re:Why won't Qualcomm stop selling chips to Apple?

[jonsmirl]

Qualcomm probably has sold billions of chips. So it is not true that they don't make anything. This dispute is about Qualcomm using their patents to prevent anyone else in the world from making chips for cell phones without paying huge royalties (rumored at $10 a chip) to Qualcomm for patent licenses. Qualcomm has made about $6B/yr profit from these licenses over the last two decades. I view $120B in royalties as excessive compensation for a some patents.

My personal solution to this is for the FCC to use some of the proceeds from 5G spectrum sales to buy the necessary patents to enable royalty free 5G phones to be built. This could be done through an auction process and patent holders would not be forced to participate. But... those licenses to 5G spectrum will come with a restriction that only technology covered by the government owned patent pool can be deployed in that spectrum. Of course the government will have to buy decent patents or no one is going to buy the 5G spectrum. This scheme fairly compensates the patent holders at the lowest cost to the public and participation is voluntary. If Qualcomm wants to hold out for $120B they can find spectrum elsewhere.

Re:Why won't Qualcomm stop selling chips to Apple?

[peragrin]

Because
1 Qualcomm only designs not makes

2) Qualcomm was getting paid royalties by tsmc and other manufactures that made Apple products but then wanted Apple to pay a second time for the same royalty because it was in the iPhone. They have spent years fighting this and Apple finally told their suppliers to stop paying those royalties too. That is to bring qualcom to the negotations table trying not to double and triple dip. Expect Apple to win but be forced to pay royalties up to the time those suppliers stopped. Which is only fair.

Patent holding companies (qualcom) like isps want to get paid two three times on the same product. And are fighting very hard to do that. Htc and Motorola don't have to pay twice for the same chipset only Apple does.

The whole point of net neutrality is to stop isps from charging content providers for delivering content that their customers asked for.

Re: Why won't Qualcomm stop selling chips to Apple

[UnknowingFool]

Because Qualcomm, like ARM, does not actually manufacture chips to sell to the likes of Apple or Samsung. Their business is to sell the design that companies like TSMC manufactures for Apple. They make a small number of them for demo/prototype purposes but not for general sale.

Re: Why won't Qualcomm stop selling chips to Apple

[jonsmirl]

Qualcomm certainly makes the Snapdragon line of SOCs which are used by the millions in many phones. But in this case Apple is not using the Snapdragon instead they have their own in-house SOC.

So... what next?

[BronsCon]

Qualcomm seems to want to be paid every time one of their chips changes hands: when the chip is sold to the manufacturer, when the phone containing the chip is shipped to the company that contracted the manufacturing company, again when the phone designer ships the phone to a store...

When the store sells the phone to the end user?

When the end user sells the phone on Craigslist or eBay, or trades it in to their carrier?

Where does it stop?

I hope Apple and Foxconn absolutely crush them.