Qualcomm seeks to block iPhone sales and manufacturing in China

Qualcomm's legal team is probably skipping lunch and working late in recent weeks, especially in China and Taiwan. While the company is attempting to fight off accusations of anti-competitive business practices, it's also taking on Apple in the courts. According to Bloomberg, Qualcomm has now filed lawsuits in China with the intent to ban both the sale and manufacture of iPhones in the country.

"Apple employs technologies invented by Qualcomm without paying for them," says Christine Trimble, a spokesperson for Qualcomm. Bloomberg notes that the company's suits are based on three "non-standard essential patents" that cover power management and a touch-screen tech like 3D Touch used in Apple's current iPhones. Trimble says that those "are a few examples of the many Qualcomm technologies that Apple uses to improve its devices and increase its profits."

Apple, of course, says the claims by Qualcomm have no merit. Spokesperson Josh Rosenstock told Bloomberg that "in our many years of on-going negotations with Qualcomm, these patents have never been discussed." Rosenstock believes that "like [Qualcomm's] other courtroom maneuvers... this latest legal effort will fail." The Cupertino company has historically used Qualcomm's modems in its phones, though it's recently switched to Intel chips for that purpose. The deal currently in place still requires that Apple pay a fee regardless of whether the phone includes a Qualcomm chip, though.

The decision by the San Diego-based Qualcomm to take Apple to court in China is notable. Canaccord Genuity Analyst Mike Walkley says that there's little to no precedent for the Chinese court to take action at the request of an American company. However, China has been Apple's fastest-growing market until pretty recently, and it's where iPhones are manufactured. Having to compensate for the lost sales and cheap labor would be a big blow to Apple, and according to Walkley, a decision in Qualcomm's favor could fuel layoffs at major manufacturing companies. The analyst further notes that a vacuum left by Apple could be filled by Chinese competitors very quickly, and believes that Qualcomm's move is aimed at getting Apple back into negotiations.

Between the $2 billion in licensing fees Apple is refusing to pay and the $773 million fine from Taiwan's Fair Trade Commission, Qualcomm is currently looking at an empty dinner plate. All we know right now is that this legal fight won't end anytime soon.

Tip: You can use the A/Z keys to walk threads.
View options

This discussion is now closed.