Compal, Hon Hai Precision/Foxconn, Pegatron, and Wistron have filed a countersuit against iPhone LTE modem supplier Qualcomm in an attempt to prevent Qualcomm from successfully forcing them to pay certain licensing fees related to the iPhone's assembly (via Bloomberg). The move is a response to a lawsuit from May when Qualcomm sued the four suppliers for "breaching their license agreements" by failing to pay royalties on the use of Qualcomm's technology in the assembly of Apple's devices.

Now, in a court filing today, the four companies have claimed that Qualcomm is asking for payments "massively in excess" of what it would normally receive. If the countersuit is successful, Apple said that it could cost Qualcomm billions in refunded fees and damages. For the manufacturers' part, the companies described the Qualcomm suit as "yet another...anticompetitive scheme" by Qualcomm.

qualcomm iphone
According to The Wall Street Journal, Apple is said to be covering the legal fees associated with the four manufacturers' defense, and that it would soon file a separate motion to combine the new countersuit with its own suit against Qualcomm, creating one unified case.

Apple’s key contention is that Qualcomm is asking the court to force the contract manufacturers to pay licensing fees due on iPhones above the level the chipmaker normally receives.

The manufacturers -- Compal, Hon Hai Precision and its Foxconn subsidiary, Pegatron Corp., and Wistron Corp. -- denied violating any payment agreements. They called the Qualcomm suit against them “yet another chapter of Qualcomm’s anticompetitive scheme to dominate modem chip markets, extract supracompetitive royalties, and break its commitments to license its cellular technology on fair, reasonable and non-discriminatory terms.”

Apple and its manufacturing partners have also responded to a separate Qualcomm court filing, in which the LTE modem supplier requested an injunction to force Apple's iPhone manufacturers to keep paying royalties during the legal battle. Apple, Compal, Foxconn, Pegatron, and Wistron have objected to the request, stating that "there's no harm to Qualcomm waiting to get paid" until the end of the case, when the court determines the correct amount.

Earlier this week, Qualcomm CEO Steve Mollenkopf said that an out of court settlement for the case could still happen, although he had no specific confirmation or update on the legal battle that suggested a settlement was coming between Qualcomm and Apple. The two companies have been embroiled in the court case since January, sparked by an FTC complaint about Qualcomm's anticompetitive patent licensing practices, and continued with Apple's own lawsuit against the supplier, and then Qualcomm's countersuit response.

If there is no settlement between Apple and Qualcomm, the case is expected to continue for the next few years.

Top Rated Comments

morcutt11 Avatar
98 months ago
Lets not forget Samsung, Intel, and the US FTC have also filed suit earlier this year against Qualcomm. It seems universally agreed that Qualcomm has essentially been extorting technology manufactures and hampering innovation with anti-competitive practices. At this point it looks like Qualcomm v. The World. I don't predict Qualcomm to be a winner in that battle.
Score: 14 Votes (Like | Disagree)
morcutt11 Avatar
98 months ago
Is Qualcomm the real threat here? Everyone is attacking Qualcomm, but who copies and steals the most?!
Oh it's Qualcomm. Let's take a look at what they are doing:
1) They charge licensing fees for patented technology not only from people that make a competing chip (e.g. Intel), but also companies that use those chips (e.g. Apple) in devices.
2) The fee that they charge for someone using a chip (even competing chip) that uses Qualcomm's patented technology is based on the price the device sells for. So Apple pays pays $15/iPhone for the entry-level iPhone, but more for iPhones that sell at higher rates due to more RAM/storage. Remember, this is the case even if Apple isn't using Qualcomm chips.
3) Because of this licensing scheme, it makes it difficult for other chip manufacturers to compete against Qualcomm, hence the US FTC anti-trust lawsuit. The FTC has said that Qualcomm is effectively taxing every cell phone sold.
4) There is also issues with Qualcomm refusing to license its technology to other chip manufacturers, promoting an anti-competitive market.
5) Along the anti-competitive line, Qualcomm has also successfully prevented Apple from implementing technology like WiMAX because it competes with Qualcomm technology.

In the end it will be a court(s) deciding if Qualcomm's technology patents fall under the "fair, reasonable, and non-discriminatory" requirements, which other manufacturers are claiming they do as the patents reflect technology that is part of the standards of mobile carrier services.
Score: 6 Votes (Like | Disagree)
Cronowerx Avatar
98 months ago
This will not end well for Qualcomm. They better settle out of court ASAP ;)

One of the big advantages of having your partners dependent on you means that your enemies are their enemies.
Score: 3 Votes (Like | Disagree)
blcamp Avatar
98 months ago
Game over, QCOM. Have a nice day.
Score: 3 Votes (Like | Disagree)
Kaibelf Avatar
98 months ago
Contract manufacturers.
Any competent judge will see through the case stacking with Apple footing the legal fees for all parties.
Doesn’t matter. Qualcomm opened the door to this very thing the minute they tried to sue the suppliers when Apple fought back. Now they will take it in the chin and likely end up paying a lot more in the end.
Score: 3 Votes (Like | Disagree)
joelypolly Avatar
98 months ago
Is Qualcomm the real threat here? Everyone is attacking Qualcomm, but who copies and steals the most?!
Well considering everyone is sueing Qualcomm they do appear to be the problem here. Lets not confuse anticompetitive behavior with something completely unrelated.
Score: 3 Votes (Like | Disagree)

Popular Stories

Generic iOS 18

iOS 18.3 Coming Soon: Here's What's New

Monday January 13, 2025 5:33 am PST by
iOS 18.3 is currently in beta for developers and public beta testers. So far, the upcoming iPhone software update is very minor in scope. Below, we outline what is new in iOS 18.3 so far. The only potential new feature coming to iPhones with iOS 18.3 so far is robot vacuum support in the Home app, but this functionality is not yet live. Apple is laying the groundwork for the feature,...
iPhone 17 Slim Feature Single Camera 1 Redux

'iPhone 17 Air' Launching Later This Year With These 10 New Features

Wednesday January 15, 2025 7:16 am PST by
While the so-called "iPhone 17 Air" is not expected to launch until September, there are already plenty of rumors about the "ultra-thin" device. Overall, the "iPhone 17 Air" is shaping up to be a mixed bag. Due to its thinness, the device is expected to have some limited specifications compared to the iPhone 17 Pro models, including only a single rear camera, only a single speaker, no SIM...
new magsafe charger

Apple Releases Updated MagSafe Charger Firmware

Tuesday January 14, 2025 11:30 am PST by
Apple today released new firmware designed for the 25W MagSafe Charger that is compatible with the iPhone 12 and later and the latest AirPods and Apple Watch models. The updated firmware is version 2A143, up from the 2A138 firmware that the accessory shipped with. In the Settings app, you'll see a different version number than the internal firmware number. The 2024 MagSafe charger was...
iPhone 17 Pro Dual Tone Feature 1

iPhone 17 Pro Launching Later This Year With These 8 New Features

Thursday January 9, 2025 5:45 am PST by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. iPhone 17 Pro concept based on rumors Below, we recap key changes rumored for the iPhone 17 Pro models as of January 2025: More aluminum: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models ...
HomePod mini and Apple TV

HomePod Mini 2 and New Apple TV Launch Timeframe Narrowed Down

Sunday January 12, 2025 4:11 pm PST by
Bloomberg's Mark Gurman recently reported that Apple plans to release new HomePod mini and Apple TV models this year, and now he has provided a more precise timeframe. In his Power On newsletter today, Gurman said Apple is currently aiming to launch the new HomePod mini and Apple TV models "toward the end of the year." That timeframe suggests the devices will be released at some point...
severance new york promo 1

Apple Promotes Severance Season 2 Premiere With Lumon Industries Pop-Up and Visits From Actors

Tuesday January 14, 2025 3:47 pm PST by
Ahead of the season two premiere of hit TV show Severance, Apple is marketing the show with a fun Severance pop-up at the Grand Central Terminal in New York City. Apple has assembled a glass cube with workstations that are identical to the setups that Lumon employees use on the show, complete with employees "working," doing yoga, playing catch, throwing paper airplanes, sipping coffee, and...
airpods pro 2 gradient

AirPods Pro 3 Expected This Year: Here's What We Know

Wednesday January 8, 2025 7:05 am PST by
Despite being released over two years ago, Apple's AirPods Pro 2 continue to dominate the wireless earbud market. However, with the AirPods Pro 3 expected to launch sometime in 2025, anyone thinking of buying Apple's premium earbuds may be wondering if the next generation is worth holding out for. Apart from their audio and noise-canceling performance, which are generally regarded as...
2024 iPhone Boxes Feature

Apple Changes Trade-In Values for iPhones, iPads, Macs, and More

Thursday January 16, 2025 6:45 am PST by
Apple today adjusted estimated trade-in values for select iPhone, iPad, Mac, and Apple Watch models in the U.S., according to its website. Some values increased, while others decreased. The changes were not too significant, with most values rising or dropping by $5 to $50. We have outlined some examples below: Device New Value Old Value iPhone 15 Pro Max Up to $630 U ...