Apple Sues Qualcomm for $1 Billion in Withheld Payments

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Posted January 20, 2017 at 9:24pm by iClarified

Apple has sued Qualcomm for $1 billion alleging that the company has been 'charging royalties for technologies they have nothing to do with'. The lawsuit follows one from the FTC which charges Qualcomm with using anticompetitive tactics to maintain its monopoly in the supply of baseband processors used in cellular phones.

Apple says Qualcomm has withheld 'nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.'

Here is Apple's full statement provided to CNBC.

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"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."
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Notably, the FTC complaint revealed Qualcomm extracted baseband exclusivity and prevented Apple from releasing a WiMax iPhone for partial royalty relief. Please follow iClarified on Twitter, Facebook, or RSS for updates.

Apple Sues Qualcomm for $1 Billion in Withheld Payments

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Peter Nielsen - January 20, 2017 at 10:49pm

A load of cr@p... Nobody forced Apple to trade/do business with Qualcomm. If Apple is/was unhappy with the terms Qualcomm demanded they could have taken their business elsewhere.

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Great! - January 21, 2017 at 1:34pm

Where pray tell?

Peter Nielsen - January 22, 2017 at 8:48am

MediaTek, Samsung, Intel, TSMC ......to mention a few.

Great! - January 22, 2017 at 12:08pm

I think you don't know what Qualcomm produces, if you think those other companies can do the same. Intel only managed to get something out for the iPhone 7.

Peter Nielsen - January 22, 2017 at 7:11pm

And I think you are misinformed. As Apple does not manufacture processors themself they instead make contracts with processor manufacturing companies which can fulfill their design and performance expectations. e.g. Samsung produced the A9 14nm processor and TSMC has made the A9 16nm version. And lately Intel has entered the scene, so there has always been alternatives to Qualcomm.

Peter Nielsen - January 22, 2017 at 7:56pm

Further to my comment above, the A9 processor is maybe a bad example as it is too a new processor. So as another example for alternative to Qualcomm, Samsung manufactured the A4 processor used in the iPhone 4/iPad and the A5 processor used in the iPhone 4S/iPad2.

SayingWhatEveryonesThinking - January 23, 2017 at 6:22am

I'm sure Apple didn't know Qualcomm would break the law before doing business with them. You act as though Apple should lie to protect them and then forget about what they're owed. Qualcomm screwed up and need to pay up. I hope Apple never uses another Qualcomm or Samsung chip ever again.

Great! - January 23, 2017 at 6:18pm

Peter, you don't get it. It isn't the processor that Qualcomm produces. The phone has more chips than just the CPU. Qualcomm produces the chip that handles the telecommunications. In it are technologies it holds many patents for. You can't simply go and get the same thing made elsewhere.