Qualcomm countersues Apple, alleges deliberate misrepresentation of facts and breach of contract

Qualcomm has countersued Apple in a bid to fight back against Apple’s $1 billion lawsuit against the company.

In its lawsuit, Qualcomm alleges that Apple “breached agreements and mischaracterised agreements and negotiations with Qualcomm”, reports TechCrunch. The report adds that Apple is accused of interfering with Qualcomm’s manufacturing partners, the ones who use Qualcomm licenses to build Apple devices.

Qualcomm’s executive VP and general counsel stated that, “Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90 percent of smartphone profits, without relying upon Qualcomm’s fundamental cellular technologies. Now, after a decade of historic growth, Apple refuses to acknowledge the well established and continuing value of those technologies.”

In its own lawsuit against Qualcomm, Apple alleges that Qualcomm has been involved in price-fixing and that the chip designer has inflated the prices of essential components with its licensing model.

Qualcomm’s licensing model charges customers based on the price of the final product being manufactured rather than a fixed price per chip. Apple seems particularly averse to this licensing model, and understandably so. They make some of the most expensive phones in the world, after all.

Describing Apple’s lawsuit as a “global attack on Qualcomm”, Rosenberg added that Apple is using its “enormous market power” to extract “unfair” licensing terms from Qualcomm.

Qualcomm’s lawsuit also accuses Apple of misrepresenting the performance of Qualcomm’s products. This is in reference to the iPhone 7, which comes in two variants, one with an Intel modem and the other with a Qualcomm modem. Since the Qualcomm chip was more capable than Intel’s offering, Apple deliberately toned down the performance of the Qualcomm chip to match Intel’s.

To put the numbers in perspective, the Intel chip is capable of downlink speeds of 450 Mbps, the Qualcomm modem is capable of 600 Mbps. As AppleInsider noted, the Samsung Galaxy S7 running the same Qualcomm modem was twice as fast as on the iPhone 7.

Apple’s original lawsuit also alleges that Qualcomm withheld $1 billion in rebates because of Apple’s cooperation with Korean regulatory authorities, cooperation that might have contributed to the $854 million fine that Qualcomm now faces.

Rosenberg, however, stated that Apple “has been actively encouraging regulatory attacks” by “misrepresenting facts and withholding information.”

Apple’s original lawsuit follows the US Federal Trade Council’s accusation that Qualcomm charged excessive royalties. Qualcomm was also sued by shareholders for allegedly misleading investors.

The Qualcomm versus Apple lawsuits are certainly gearing up to be something spectacular. At stake are billions of dollars in licensing fees and the very foundation of Qualcomm’s income stream.


Published Date: Apr 11, 2017 11:19 am | Updated Date: Apr 11, 2017 11:19 am