Early this year, Apple filed a lawsuit against Qualcomm’s monopolistic practices on its standard-essential patents. This resulted in the former withholding around $1 billion worth of royalties to the latter. Now, it seems like a number of Apple suppliers are also following suit into not paying royalties to Qualcomm.
According to an Apple Insider report, Qualcomm has released a memo along with its latest Securities and Exchange Commission filings. In the said memo, Qualcomm is warning investors of possible earnings issues starting with the third fiscal year of 2017 due to some unnamed suppliers failing to pay royalties.
The report also added that these non-payments are in conjunction to the recent lawsuit that Apple filed against the company.
According to the Apple lawsuit, Qualcomm has been extorting Apple and its suppliers with exorbitant royalties. Apple also accused Qualcomm of flouting the fair, reasonable and nondiscriminatory patent commitments to charge suppliers as well as price gouging, double dipping and other nefarious activities.
In retaliation, Qualcomm filed a counter to Apple’s claims alleging the latter of breaching contractual agreements. Furthermore, Qualcomm further suggested that Apple has been involved in inducing regulatory actions to the former through malicious lawsuits. Finally, the counter lawsuit also mentions of Apple’s throttling of Qualcomm modems on the iPhone 7.
It seems that both companies are still locked in a legal bind at the moment. There is no telling on when and to what point the relationship will last. The recent lawsuits have led Qualcomm paying penalties of around $850 million to date. It is possible that it could go much worse than that.
Qualcomm risks losing one of its biggest clients if this issue is not resolved. However, on Apple’s part, the company is already moving ahead on its plans of being self-reliant altogether. It has already started setting up its own research teams involved in various parts of its manufacturing process. For instance, Apple has been reported to setup a team that will facilitate designs for in-house GPU and battery power management chips. It will not be surprising at all that at some point, Apple will also have its own communication modules instead of third party suppliers like Qualcomm. For more tech updates, be sure to check us out at TheBitbag.