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News: Analysis<br />
Qualcomm says Apple using its power<br />
to pay less for a patent licence<br />
Qualcomm is demanding damages and withheld payments from Apple writes John Ribeiro<br />
Q<br />
ualcomm is seeking damages from<br />
Apple, alleging that the iPhone<br />
maker interfered with long-term<br />
agreements between the chip company and<br />
licensees that manufacture the iPhone and<br />
iPad, and encouraged actions by regulators<br />
against the company by giving government<br />
agencies “false and misleading information”.<br />
Apple did not use certain highperformance<br />
features of the Qualcomm<br />
chipsets for the iPhone 7, claims the<br />
chipmaker. When iPhones with the<br />
Qualcomm processor still outperformed<br />
iPhones that used a chipset from key rival<br />
Intel, Apple is said to have publicly claimed<br />
that there was “no discernible difference”<br />
between iPhones using Intel chipsets and<br />
those using Qualcomm processors, when it<br />
knew the opposite to be true, according to<br />
a recent filing by Qualcomm.<br />
Apple warned that if Qualcomm were to<br />
make or sponsor public comparisons of the<br />
Intel and Qualcomm-based iPhones, Apple<br />
would use the marketing resources at its<br />
disposal to “retaliate” against Qualcomm<br />
and its standing as an Apple chipset<br />
supplier would be jeopardised.<br />
The filing in the US District Court for the<br />
Southern District of California is in response<br />
to a lawsuit Apple filed against the company<br />
in January, accusing the chip supplier of<br />
charging “exorbitant” licensing fees for its<br />
cellular technology.<br />
Apple is seeking nearly $1 billion in<br />
compensation for paying excessive royalties<br />
to Qualcomm. The company said in its filing<br />
in January that Qualcomm’s licensing model<br />
is based on the final selling price of a device,<br />
so that the royalty paid for its standardessential<br />
patents by makers of high-value<br />
phones will be higher than that paid by<br />
makers of basic mobile phones.<br />
The smallest saleable unit for a cellular<br />
SEP license should be no greater than the<br />
baseband processor chipset, Apple argued. It<br />
also wants Qualcomm to negotiate singlepatent<br />
licenses rather than offer a license to<br />
its patents as a single portfolio.<br />
Both companies have a lot at stake. Apple<br />
would like to find ways to lower the cost of<br />
its iPhones, particularly in newer, pricesensitive<br />
markets, while Qualcomm makes<br />
a significant portion of its revenue from<br />
licensing its intellectual property.<br />
In its response, Qualcomm portrays<br />
Apple as using its considerable power to<br />
try to get lower royalty rates from the chip<br />
company. After filing the lawsuit in the court<br />
in California, Apple also sued Qualcomm<br />
in China, the UK and Japan as part of<br />
“its aggressive strategy of constructing<br />
commercial disputes and then claiming it has<br />
been victimised,” according to the filing.<br />
When asked for comment, a spokesman<br />
for Apple referred back to the company’s<br />
statement in January in which it claimed<br />
that Qualcomm had insisted on charging<br />
royalties for technologies they have<br />
nothing to do with.<br />
“The more Apple innovates with unique<br />
features such as TouchID, advanced displays,<br />
and cameras, to name just a few, the more<br />
money Qualcomm collects for no reason and<br />
the more expensive it becomes for Apple to<br />
fund these innovations,” the iPhone maker<br />
said in that statement, when filing the suit<br />
against Qualcomm in the California court.<br />
Apple said that Qualcomm has taken<br />
“increasingly radical steps”, including most<br />
recently by withholding nearly $1 billion in<br />
payments from Apple as retaliation for its<br />
PHOTOGRAPHY: Ann SinGeR<br />
12 www.pcadvisor.co.uk/news <strong>July</strong> <strong>2017</strong>