Qualcomm has filed a lawsuit against Apple in its continuing legal battle over patents, this time looking to block the manufacturing and sale of iPhones in China, according to a report by Bloomberg this morning.
It’s another shot at Apple as the companies continue to duel with Apple regarding payments for its technology. Apple filed a $1 billion lawsuit with Qualcomm in January and the saga has just continued with that as both companies look to take the fight to courts. The U.S. International Trade Commission in August said it was investigating claims that Apple is violating some of its patents related to mobile technology in some of its phones.
Qualcomm is one of the biggest chip producers, with its technology like the Snapdragon. Qualcomm’s Snapdragon 835 chip is present in Google’s new Pixel phone, for example. As such, fighting with one of the biggest mobile device manufacturers in the world is a difficult situation for the company. Since the saga started, Qualcomm’s stock has declined sharply and is down around 19% on the year.
“The reason that we’re pursuing this is that Qualcomm‘s trying to charge Apple a percentage of the total iPhone value, and they do some really great work around standards-essential patents, but it’s one small part of what an iPhone is,” Apple CEO Tim Cook said on the company’s second-quarter earnings call earlier this year. “It’s not — it has nothing to do with the display or the Touch ID or a gazillion other innovations that Apple has done. And so we don’t think that’s right. And so we’re taking a principled stand on it, and we strongly believe we’re in the right. And I’m sure they believe that they are, and that’s what courts are for. And we’ll let it go with that.”
Most of Apple’s manufacturing happens in China — so this would inflict a pretty hard hit on the company if successful, though this is likely destined to go through complex appeals and battling processes ad infinitum. The Bloomberg report says Qualcomm filed the suit in China so we might see this play out differently than we would see in the U.S. courts. But it’s just another step in the ongoing match between Apple which could have massive financial ramifications for one or both companies.
Both Apple and Qualcomm are set to report their earnings in the coming weeks, and Apple has signaled that it’s going to have a stronger quarter than initially expected with the rollout of the iPhone 8. Apple’s iPhone X is still on the way and won’t be available for pre-order until October 22. Apple’s stock has risen dramatically in the past year and it seems the company is primed to hit $1 trillion if it’s able to continue that streak. That’ll depend on the performance of the iPhone X and its other products, which again a successful suit could have lasting ramifications for this run.
We reached out to Qualcomm and Apple for additional comment and will update the story when we hear back.
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