Qualcomm Accuses Apple of Helping Intel Using Qualcomm Software
Qualcomm on Wednesday filed yet another lawsuit against Apple, this time accusing the company of breaching software licensing terms and using Qualcomm code to help Intel, reports Bloomberg.
According to Qualcomm, Apple breached a contract that dictates the use of software that's designed to make Qualcomm chips work with other iPhone components. Qualcomm also believes Apple may have used its access to that software to help Intel with its own modem chip development.
Since 2016, Apple has been using LTE chips from both Intel and Qualcomm in an effort to diversify its supply chain and move some production away from Qualcomm. The iPhone 7, 7 Plus, 8, and 8 Plus all use a mix of Qualcomm and Intel chips.
In light of the ongoing legal battle with Qualcomm, Apple is said to be considering eliminating Qualcomm chips from its devices all together, instead adopting chips from Intel and possibly MediaTek. Rumors suggest Qualcomm has been withholding software from Apple that Apple needs to test prototype devices for next year, forcing Apple's hand.
Qualcomm and Apple have been involved in an escalating legal fight since the beginning of the year after Apple sued Qualcomm for $1 billion. Apple has accused Qualcomm of charging unfair royalties for "technologies they have nothing to do with" and failing to pay for quarterly rebates.
Apple has since stopped paying royalties to Qualcomm until new licensing fees have been worked out, as have Apple suppliers, significantly impacting Qualcomm's profits.
Qualcomm has since levied several lawsuits against Apple, accusing the company of patent infringement and asking both the United States and China to block imports and exports of some iPhone models.
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Top Rated Comments
Can you imagine Apple's reaction if their own retailers decided to stop making payments for millions of iPhones they've taken delivery of and sold, until "new fees had been worked out"???
It doesn't matter whose chips they use. They still have to pay Qualcomm (and Nokia, Ericsson, LG, Samsung, etc) royalties for the IP involved.
Forget that Qualcomm makes chips on the side. That's just a small part of their profit stream.
You've got it backwards. It's Apple who is acting like they cannot pay a few bucks royalty on phones they charge customers hundreds for.
Qualcomm basically invented the core of 3G, and is a major contributor to 4G (LTE) and beyond.
They spend billions each year on R&D, and get about 3,000 patents per year.
In other words, you can greatly thank them for the high data speeds you enjoy today and in the future.
CHIPS - The chip vendor side of Qualcomm sells each part at a fixed price. Apple can buy those chips, or chips from anyone else who sells a chip for less. Which they do already, having used chips from Infineon, Intel (who bought Infineon) and Qualcomm.
IP - But chips are just silicon, sold at a price reflecting what it took to design and manufacture them. They do NOT REPEAT NOT include all the IP surrounding them or software needed to run them, for which a device maker must pay all the companies who created that IP / software.
Think of it like the difference between selling an ARM chip and if Apple were to license iOS. They're not the same thing, and the chip would not include a license for the OS. Likewise a modem chip is just a fancy CPU (DSP), useless without code to run it.
Here are just some of the inventors whom a phone maker has to pay to utilize 3G:
And guess what? Most of them charge by the device cost. Just as with the App Store, everyone pays a percentage. In that way, higher cost products subsidize lower cost products, leading to more customers for everyone. It's a common way of licensing IP.
Apple is not just targeting Qualcomm. They want to shave royalties to everyone. Even though they've made hundreds of billions themselves selling phones that rely on the IP of others.