The battle between Apple and Qualcomm over patent royalty payments continues, with Qualcomm devoting the first 20 minutes of its hour-long quarterly earnings call to discussing the dispute, notes CNET.
The dispute began when the FTC accused Qualcomm of engaging in anti-competitive practices by insisting on being Apple’s exclusive supplier of baseband processors in return for reduced patent royalties. Apple then sued Qualcomm for around a billion dollars, accusing it of withholding a $1B rebate.
Bring it on, Apple — at least, that’s what Qualcomm’s top executives seemed to be saying Wednesday. Qualcomm CEO Steve Mollenkopf and Derek Aberle, head of the wireless chipmakers’s licensing business, fired back at lawsuits filed over the past week by Apple in the US and China. Those suits, they said, are all about the money, an effort by Apple to squeeze as much money as possible from its supplier.
Qualcomm described the accusations as baseless and said that Apple ‘misrepresented facts.’ The company later said that it was considering a countersuit against Apple. Instead, Apple filed a second lawsuit, this time in China, seeking a further $140M in damages.
Apple started using Intel 4G LTE chips in the iPhone 7/Plus, but because these chips include technology patented by Qualcomm, it has to pay a royalty to the company. Mollenkopf claimed that the royalty rate the company demanded was reasonable given the money that Apple makes from using the technology.
The company did, however, strike a conciliatory note in repeating earlier assurances that it would continue to supply Apple with chips during the dispute, and that it was confident the issue would be resolved.
“They want to pay less for the fair value that Qualcomm has established in the marketplace for our technology, even though Apple has generated billions in profits from using that technology.” While the value of Qualcomm’s patents have “tangibly and meaningfully increased over time,” it has never raised its royalty rates, Mollenkopf added.
Apple referred CNET to an earlier statement.
I’m confident we’ll address and get through the legal challenges underway, as we have done many times in the past.
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.
