After settlement with Apple, Qualcomm still faces other potential legal fallout

“Apple and mobile chip maker Qualcomm have settled a bitter financial dispute centered on some of the technology that enables iPhones to connect to the internet,” Michael Liedtke reports for The Associated Press. “The surprise truce announced Tuesday came just as the former allies turned antagonists were facing off in a federal court trial that was supposed to unfold over the next month in San Diego. The resolution abruptly ended that trial, which also involved Apple’s key iPhone suppliers.”

“The deal requires Apple to pay Qualcomm an undisclosed amount. It also includes a six-year licensing agreement that likely involves recurring payments to the mobile chip maker,” Liedtke reports. “Neither Apple nor Qualcomm would comment beyond a brief statement announcing they had resolved their differences. Details about how much Apple and its iPhone suppliers will be paying Qualcomm could emerge in court documents or when the companies announce their latest financial results. Apple is due to report its quarterly results on April 30 while Qualcomm is scheduled to release its numbers on May 1.”

“Qualcomm still faces other potential fallout from its demands to be paid royalties in addition to the fees it charges for its mobile chips. The Federal Trade Commission has accused the company of using its royalty system to stifle competition in the mobile chip market in another case in which Apple played a central role,” Liedtke reports. “A trial about the FTC’s lawsuit wrapped up in a San Jose, California, court in January, but the judge still hasn’t issued a ruling.”

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“Qualcomm is still waiting for a federal judge’s ruling on claims by the U.S. Federal Trade Commission that the company’s licensing practices are anti-competitive,” Ian King and Mark Gurman report for Bloomberg. “The regulator accused Qualcomm in a 2017 lawsuit of using its dominance in the smartphone technology market to thwart competitors’ growth and force companies including Apple and Huawei Technologies Co. to pay inflated patent royalties. A nonjury trial in San Jose, California, was held in January.”

“Separately, Qualcomm faces a class action on behalf as many as 250 million consumers seeking as much as $5 billion in damages over claims they suffered from inflated retail prices,” King and Gurman report. “The company has said it’s probably the largest class action in history and is asking an appeals court to block the consumers from proceeding as a group.”

Read more in the full article here.

MacDailyNews Take: Hopefully, the end result of all of these legal actions will be that Qualcomm’s predatory licensing practices are over!

SEE ALSO:
Qualcomm and Apple settle, agree to drop all litigation – April 16, 2019
Billions at stake as Apple v. Qualcomm trial begins – April 16, 2019
Apple-Qualcomm jury includes woman who’s never owned smartphone – April 16, 2019
Apple, allies seek damages of up to $27 billion in U.S. trial over Qualcomm’s predatory business model – April 15, 2019
Frosty relationship between Apple CEO Tim Cook and Qualcomm CEO Steve Mollenkopf has deepened dispute – April 13, 2019

7 Comments

  1. If this is how you negotiate prices for chips for upcoming phones with lawsuits and trials and opening arguments and last minute settlements to avoid a jury decision, then I think its time to find a new source of chips.

    1. Apple has their silicon group working on cellular modem chips right now. If I were a betting man, I’d say that Apple’s chips will be ready to go in less than six years…

      1. I’m rather thinking this whole affair has been about freeing up the road for Apple to produce its own chips down the line without the killer legacy hurdles that has so plagued Intel and others from being able to compete. After all the cost of producing competitor chips while still being locked into paying Qualcomm its millions anyway destroys any advantage or even any point in doing so. So it will be interesting to see if they have succeeded in that sim or simply eased somewhat the initial pain of dealing with them directly.

      2. Love it when after years of telling everyone how evil Qualcomm is, now the truth comes out that Cook is going to pay, and he signed a 6 year contract with that oh so terrible chipmaker. Thanks for the endless bias MDN.

        Then you immediately jumpstart speculation that must mean Apple will decimate every other chipmaker in another 6 years. Really? Not under this SJW ceo. Apple has thousands of people scattered all over the globe designing chips and most of them don’t know what the other hand is doing. Incremental follow the innovator, take zero risk, outsource everything— that is the Cook way. Focused insourcing, not so much. It’s much more likely that in 6 years Timmy will come out as a robot controlled by Bill Gates than we see any product from Apple with all Apple chips.

        Of course, since the future is unwritten, let’s toss an equally likely scenario out there. in 6 years a wave of industry consolidation could happen, so when Amazon buys Apple, Bezos might have the intestinal fortitude to get those chips done in a year or two.

        1. Until you know the terms of the settlement, you don’t know whether Apple or Qualcomm “won.”

          In any case, Apple now has six years to develop its own modems without hassles from Qualcomm.

          What will Qualcomm have in six years when Apple pulls the plug?

          1. Normally when one company pays another, the side forking over the cash is not considered to have won.

            Apple’s case was based on it whining that it had to pay Qualcomm the equivalent of Apple RAM-level pricing. Oops. bad analogy, RAM is a commodity item. Qualcomm has a legal monopoly called PATENTS. So really Apple’s case was based on its whining that it had to pay Apple Lightning adapter licensing fees in addition to what it thinks is high pricing. In other words, the pot is calling the kettle black. In any store I have ever seen, a Lightning cable costs at least 50% more than the otherwise identical USB-C cable right next to it. Apple price gouging on display.

            Yes, Apple folded. Apple will not make its own modems, it would have to wait for the patent to expire and by that time the industry will be hyping 6 or 7G mobile and hopefully Cook will be gone.

  2. Well it looks like Apple lost another huge litigation case. Faced with intel unable to create acceptable 5G chips, Apple had to put its tail between its legs and surrender lest it be blown away by android / Samsung competition.

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