Apple files 1 Billion dollars against Qualcomm
Apple files 1 Billion dollars against Qualcomm. While many of you must have heard of the recent lawsuit, filed by Apple, against Qualcomm, evaluating to a price of almost 1 billion dollars, claiming to be charged differently in international markets, most of us actually do not really know what is the basis of such claims. I am fortunate to have two friends, one working for Apple and the other working for Qualcomm to give me inside bytes into the mood within both the workplaces. Let’s have a look:Apple files 1 Billion dollars against Qualcomm
Apple: The lawsuit originated because of the fact that Qualcomm was charging Apple differently for supplying the WLAN ICs. Apple accused Qualcomm of overcharging for chips and refusing to pay some $1 billion in promised rebates. Apple said in its complaint that Qualcomm withheld the rebates because of Apple’s discussions with South Korea’s antitrust regulator, the Korea Fair Trade Commission. If that were not enough, Qualcomm then attempted to extort Apple into changing its responses and providing false information to the KFTC in exchange for Qualcomm’s release of those payments to Apple, to which Apple refused vehemently.
It also accused Qualcomm of selling chips while requiring Apple to pay a separate licensing fee for the same chips, in a “no license, no chip” policy.In addition, Qualcomm pressured network carriers to not sell or support Apple devices made with Intel chipsets Apple said.
Qualcomm: Qualcomm as expected have claimed that the complaints are completely baseless. Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information.
Qualcomm has patents for chips which include standard essential patents, a term used to describe technology that is required to be licensed broadly and on “reasonable” terms.
In its lawsuit, Apple accused Qualcomm of refusing to license the technology to other manufacturers to prevent them from making the chips.
While the exact truth would only be out, once the case goes to court, there are actually two important points to make note of.
Qualcomm is actually a toll collector, meaning it collects a royalty on every chip that it supplies. This adds significantly to Qualcomm’s earnings. Qualcomm has been an innovator over the years and licensing is an important source of revenue for them. By not releasing technology to the market, it attempts to thwart competition from other chip manufacturers.
Apple is known for seeking multiple suppliers to keep prices down, said Jim Morrison, vice president of technical intelligence for TechInsights, which tears down devices to analyze their parts. Its complaint is valid since it claims that Qualcomm charges a price for the chips, as well as a separate licensing fee for the technology which it has innovated, thus making them overpriced. However, since the technology is not available to other competitors, because Qualcomm has not released it, there is no other way out but to depend on Qualcomm for these WLAN chips. And this is where Apple is fuming.