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.

Comments closed
    • End User
    • 2 years ago

    Microsoft is wistfully wishing it had this problem.

    • Unknown-Error
    • 2 years ago

    Will Qualcomm turn into another Rambus but with a LOT more capital?

      • frenchy2k1
      • 2 years ago

      No, Qualcomm is a powerhouse that has huge investments in wireless technology and is at the heart of developing standards.
      Their CFO has correctly identified this fight as a late technology one: 4G is now ubiquitous and handset manufacturers are looking into cutting costs.
      Once 5G arrives, no one will discuss the cost anymore as the value added will be real.

    • strangerguy
    • 2 years ago

    I can see what’s with their sudden interest in litigation because QC is getting more desperate and marginalized every passing year: Samsung/Mediatek/Huawei already has a inhouse modem solution with their SoCs, Apple can go the Intel route if they choose to, CDMA is a dying standard and their SoC CPU/GPU performance has failed to impress versus vanilla ARM for a long time, let alone Apple AX chips.

      • albundy
      • 2 years ago

      so verizon and sprint will change to GSM?

        • Ari Atari
        • 2 years ago

        CDMA is for 2g and 3g not LTE I believe and with Verizon moving to voice over LTE, even Verizon won’t have a long term reason to use it.

          • brucethemoose
          • 2 years ago

          Except that 2G/3G covers alot more area than LTE.

            • Ari Atari
            • 2 years ago

            Hush, LTE covers everywhere. If it doesn’t, you aren’t in the US.

            /s

            Yes, but Verizon hasn’t cared in the past that the old tech works in places the new tech doesn’t when it comes to shutting down old telephone lines; I could easily see something similar happening when the time comes.

    • NovusBogus
    • 2 years ago

    Stock up on popcorn, boys, Apple v Qualcomm is going to be a heavyweight title match for IP litigation.

    • watzupken
    • 2 years ago

    “Using their technology” is a usual reason to sue, but it is obvious that it is more than meets the eye. I think Qualcomm should just move on just because someone is not using their product, and focus on working on improving their products so that it will become more attractive.

      • frenchy2k1
      • 2 years ago

      They cannot move on, Apple is refusing to pay their licensing fees for CDMA.
      Qualcomm is suing them on non-standard-essential patents, because suing on standard essential patents will never result in a ban, as licensing is compulsory (they have no choice but to license and hence cannot block sales).

      As stated, this is a negotiating move, nothing more.

      Apple is engaging in “reverse patent holdup”: [url<]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1711744&rec=1&srcabs=987321.&alg=1&pos=10[/url<] They are refusing to pay the patent holder and will delay the case through the courts, hoping the patentor will cave to their demands because of the financial pressure (expensive litigation and reduced revenue).

    • ludi
    • 2 years ago

    Are they suing Apple for $774m, by any chance? I hear they have bills to pay.

      • frenchy2k1
      • 2 years ago

      Apple is withholding payment on their $2 Billions of annual licensing fees.

      The $774M is peanuts compared to that.

    • blastdoor
    • 2 years ago

    I’ll hazard a guess that the Chinese government likes Apple more than QCom (or at least dislikes Apple less than they dislike QCom).

    Apple employs (albeit indirectly) millions of Chinese citizens and is fairly cooperative with the Chinese government. QCom does nothing productive for China.

      • DancinJack
      • 2 years ago

      Except provide a bunch of Chinese phone makers modems for a lot of phones?

        • blastdoor
        • 2 years ago

        Wrong. They charge a bunch of Chinese phone makers to license patents for modems for a lot of phones.

        The Chinese aren’t big fans of paying Western companies patent licenses. That’s all QCOM is — a patent license collection agency.

          • frenchy2k1
          • 2 years ago

          Well, they also develop the standards and do a lot of heavy research to create the patents…

          details, I guess…

            • adisor19
            • 2 years ago

            Patents which should be available under FRAND and not as a tax percentage of the TOTAL device’s sale price.

            Adi

            • blastdoor
            • 2 years ago

            Exactly. If Qualcomm wants its patents to be used as the basis of “standards” then it needs to accept an appropriate payment.

    • adisor19
    • 2 years ago

    “The Cupertino company has historically used Qualcomm’s modems in its phones, though it’s recently switched to Intel chips for that purpose.”

    Ahem.. You might wanna revisit your iPhone history..

    iPhone – Infineon
    iPhone 3G – Infineon
    iPhone 3GS – Infineon
    iPhone 4 – Infineon and (Qualcomm only for Verizon CDAM)
    iPhone 4S – Qualcomm
    iPhone 5 – Qualcomm
    iPhone 5S – Qualcomm
    iPhone 6 – Qualcomm
    iPhone 7 – Intel(after they acquired Infineon) for GSM LTE and Qualcomm for CDMA
    iPhone 8 – Intel for GSM LTE and Qualcomm for CDMA
    iPhone X – Intel for GSM LTE and Qualcomm for CDMA

    The trend here is that Apple has been forced by Qualcomm to use their chips as an exclusivity clause when Apple needed CDMA. Apple told Qualcomm to get bent with the iPhone 7 and the writing is on the wall concerning CDMA as most carriers are implementing VoLTE.

    Which leads us to this current situation.

    Adi

      • Lord.Blue
      • 2 years ago

      Just remember that the 5s and forward iPhones with the Qualcomm modem were capable of faster speeds than the ones with the Intel modems. Apple had to slow them down in software so that people would not see the difference. Also the Qualcomm modems would work on all carriers where the Intel ones would not work on CDMA.

        • willmore
        • 2 years ago

        It’s almost like you didn’t even read the parent post.

      • derFunkenstein
      • 2 years ago

      You could change it to say “for much of its history” because 6 years (4 exclusive, 2 in tandem) is much of the iPhone’s history, but then you realize you’re just arguing semantics so you could post a list.

      • Gadoran
      • 2 years ago

      2018 Apple with Intel modem in all models. Finally Intel has a working CDMA. XMM 7560.

        • frenchy2k1
        • 2 years ago

        Wouldn’t change anything.
        Any company implementing CDMA needs to pay Qualcomm their pound of flesh. This is why most phone company releasing handset with CDMA uses their chips:
        – their modems are very good (usually better than the competition)
        – the price difference is insignificant as the patent licensing is most of the price.

        The latest ban request is just “business as usual” for how big companies negotiate lately.
        This is how Apple and Samsung have fought, how Apple/MS fought with google and now how Qualcomm and Apple negotiate their licensing price.

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