Qualcomm Countersues Apple, Says iPhone Wouldn't Be Possible Without Its Technologies

Qualcomm today announced it has countersued Apple in the U.S. District Court for the Southern District of California, nearly three months after the iPhone maker sued the chipmaker for $1 billion in alleged unpaid royalty rebates. Apple also accused Qualcomm of engaging in anticompetitive licensing practices.

Qualcomm X12
Qualcomm, which earlier called Apple's lawsuit "baseless," officially denied the majority of Apple's allegations, and accused the Cupertino-based company of failing to engage in good faith negotiations for a license to its 3G and 4G standard essential patents on fair, reasonable, and non-discriminatory terms.

The chipmaker also accused Apple of breaching its licensing agreements, making false statements, and encouraging regulatory attacks on its business in multiple countries. Qualcomm added that Apple has deliberately "chose not to utilize the full performance" of its LTE modem in its iPhone 7 and iPhone 7 Plus.

Apple uses Intel's XMM7360 and Qualcomm's Snapdragon X12 modems for GSM and CDMA models of the iPhone 7 respectively. Independent testing last year found Qualcomm's LTE chip to significantly outperform Intel's LTE chip in the iPhone 7, but it could theoretically be even faster.

Apple, however, said there is "no discernible difference" in performance between the Qualcomm and Intel modems in any of the models.

Qualcomm said Apple's statement misrepresented the performance disparity between iPhones using its modems and those using Intel-supplied modems. Apple then allegedly threatened Qualcomm about making any public comparisons about the apparently superior performance of the Qualcomm-powered iPhones.

Qualcomm, the exclusive supplier of 3G and LTE modems for iPhones until 2016, said Apple has "launched a global attack" against its company, using its "enormous market power" to coerce unfair and unreasonable licensing terms. The chipmaker insists that it will "vigorously defend" its business model.

“Over the last ten years, Apple has played a significant role in bringing the benefits of mobile technology to consumers with its popular products and services," said Don Rosenberg, executive vice president and general counsel of Qualcomm. "But Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90 percent of smartphone profits, without relying upon Qualcomm's fundamental cellular technologies. Now, after a decade of historic growth, Apple refuses to acknowledge the well established and continuing value of those technologies. It has launched a global attack on Qualcomm and is attempting to use its enormous market power to coerce unfair and unreasonable license terms from Qualcomm. We intend to vigorously defend our business model, and pursue our right to protect and receive fair value for our technological contributions to the industry.”

Qualcomm said Apple "could not have built the incredible iPhone franchise" without relying upon Qualcomm's "fundamental cellular technologies." In its countersuit, Qualcomm went as far as saying Apple has "contributed virtually nothing to the development of core cellular technology."

Apple is the world's most profitable seller of cellular devices. But as a late-comer to the cellular industry, Apple contributed virtually nothing to the development of core cellular technology. Instead, Apple's products rely heavily on the cellular inventions of Qualcomm and others. Apple's iPhones and other products enjoy enormous commercial success, but without lightning-fast cellular connectivity—enabled in large part by Qualcomm's inventions—Apple's iPhones would lose much of their consumer appeal.

Qualcomm is seeking, among other things, both compensatory and punitive damages from Apple in amounts to be proven in a jury trial for "reneging on its promises in several agreements." It is also seeking to be released from any obligation to make further payments to Apple, per the court filing.

Apple for its part accused Qualcomm of using its position as the supplier of a key iPhone component to drive up patent licensing fees. In January, the Federal Trade Commission alleged that Qualcomm required Apple to exclusively use its modems from 2011 to 2016 in exchange for lower patent royalties.

Top Rated Comments

Tycho24 Avatar
92 months ago
Funny. This is exactly what the Australian banks are so annoyed about. Apple comes in late (with apple pay in that instance) and uses its market power to bully smaller companies into giving a share of profits without taking any of the risks of developing the technologies in the first place.
Lol, really??
THAT is your take of the Australian bank situation??
Seriously? That Apple has a cockamamie half-baked insecure mobile banking solution, that it quickly jerry-rigged & threw out there... undermining the REAL technology and security innovators (a few Australian banks nobody has heard of), who put together something MUCH more secure than the secure enclave + TouchID & Apple shouldn't hold them back from making their solution the world standard.

Ummmm, ok.
Score: 17 Votes (Like | Disagree)
A MacBook lover Avatar
92 months ago
Qualcomm is a snake. A big one. Apples gotta get a little dirty to take down this evil entity
Score: 15 Votes (Like | Disagree)
tbobmccoy Avatar
92 months ago
Oooooooh snap! I really am sore having to deal with a weaker Intel chip in my phone. I'd have preferred if Apple just paid for the best chip here.
Score: 12 Votes (Like | Disagree)
techwhiz Avatar
92 months ago
I like Apple and I'm an Apple Shareholder.
But let's be real Apple is an 800 pound Gorilla.
Getting into bed with Apple can be hazardous to you business.
Ask Portal Player and Imagination Tech.
Score: 11 Votes (Like | Disagree)
Kittenyarn Avatar
92 months ago
Funny. This is exactly what the Australian banks are so annoyed about. Apple comes in late (with apple pay in that instance) and uses its market power to bully smaller companies into giving a share of profits without taking any of the risks of developing the technologies in the first place.
Score: 9 Votes (Like | Disagree)
MH01 Avatar
92 months ago
Qualcomm V Intel is why I returned my £1k + iPhone 7, my iPhone 6S got better reception (all throughout my house, while the 7 dropped out in certain rooms)

Not buying into all this legal crap, though the intel model is crap, and yes apple is lying through thier teeth if they expect us to believe that the intel model is the same as the Qualcomm. It's penny pinching crap for a very expensive phone.
[doublepost=1491891201][/doublepost]
Lol, really??
THAT is your take of the Australian bank situation??
Seriously? That Apple has a cockamamie half-baked insecure mobile banking solution, that it quickly jerry-rigged & threw out there... undermining the REAL technology and security innovators (a few Australian banks nobody has heard of), who put together something MUCH more secure than the secure enclave + TouchID & Apple shouldn't hold them back from making their solution the world standard.

Ummmm, ok.
"A few Australian banks nobody has heard of" you sound like one of those champs that think Australia is between Germany and Hungary .

We are talking about contactless tech here, though feel free to ignore the obvious here and move to goal posts to apple's implementation . The arguement is the NFC capabilities in the Apple phone that apple refuses to open up .....and it only works if you pay $$$$....cough anti competitive cough...

What exactly is your take on the Oz banking situation? Security? Maybe lack of equality / diversity ? It's a good way Tim spins facts these days :)
Score: 7 Votes (Like | Disagree)

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