June 20, 2017
The battle between two of the worlds’ most influential technology companies is starting to heat up, and it looks like Apple is not going to settle for any less than taking Qualcomm out.
What seemingly started as a minor spat has escalated into full-scale war, with the iLeader going for the throat in its latest lawsuit. According to Reuters who have seen the briefing, Apple argues that license agreements that secure Qualcomm a fee for every iPhone manufactured are invalid. Should the courts favour Apple’s arguments, the foundation of Qualcomm’s business model could be taken away. As the kids would say, sh*t is about to get real.
The initial spat began back when Apple aided Korean investigators in a Qualcomm investigation, but since then they have been additional lawsuits and counter lawsuits. It’s been taken up a notch at every level, there has been collateral damage and now it is getting to the business end. Apple seems to be like that bully on the playground who isn’t happy until total humiliation has been achieved. Unfortunately for Qualcomm, it seems the iButcher wants to remove the chipmaker from the technology landscape.
Apple is taking precedent from a ruling against Lexmark, and resale of its used ink cartridges. The courts ruled last month that Lexmark International’s patent rights are exhausted with its first sale of the cartridges, irrelevant to any restrictions that it tries to impose on resellers. It created a ‘return programme’ designed to prevent others from acquiring, refurbishing and reselling its used cartridges. This practise has now been deemed illegal.
Qualcomm currently sells the chips to Apple, but then under the licensing agreement, also receives a cut of every iPhone sold, irrelevant as to whether it has one of the chips in it or not. Apple argues the current model allows the chipmaker to get rewarded twice, and is therefore illegal. Qualcomm’s argument is that as it’s a ‘research and development engine for the entire mobile industry’, even if companies do not use the chips, all must pay for the technology used as part of the industry standard.
It certainly sounds like a cosy position for Qualcomm, but let’s not assume Apple is completely innocent here. The way it manages its supply chain, making contractors such as Foxconn sign agreements with suppliers such as Qualcomm to mitigate risk, certainly does not make the iBoss the friendly brand portrayed on TV.
Only the courts can decide who is in the right and who is in the wrong, but be wary of believing all of Apple or Qualcomm claims as the bitter battle continues on.
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