“Apple Inc has decided to withhold royalty payments to its contract manufacturers that are owed to Qualcomm Inc, until a legal dispute between the companies is resolved, the chipmaker said on Friday,” Anya George Tharakan reports for Reuters. “Qualcomm, the largest maker of chips used in smartphones, said it will not receive royalties from Apple’s contract manufacturers for sales made during the quarter ended March 31.”
“San Diego, California-based Qualcomm also slashed its profit and revenue forecasts for the current quarter, to account for the lost royalty revenue,” Tharakan reports. “Qualcomm’s shares fell 4 percent to $51.06 in premarket trading.”
“Apple sued Qualcomm in January, accusing the company of overcharging for chips and refusing to pay some $1 billion in promised rebates. ‘Without an agreed-upon rate to determine how much is owed, we have suspended payments until the correct amount can be determined by the court,’ an Apple spokesman said via email on Friday,” Tharakan reports. “Qualcomm lowered its forecast for current-quarter adjusted profit to 75-85 cents per share, from 90 cents-$1.15 per share.”
Read more in the full article here.
MacDailyNews Take: The chickens are finally coming home to roost for Qualcomm.
In 2017, Qualcomm’s licensing scam — charging a percentage of the total cost of all components in the phone, even non-Qualcomm components — is unreasonable, illogical, and irrational.
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