Qualcomm says Apple is 7 Billion behind in royalty payments

In a court hearing on Friday, Qualcomm said that Apple was $7 billion behind in royalty payments. Apple, in turn, argued that Qualcomm was unfairly charging for the use of its patents. The rift between the two companies which began last year is based on the disagreement on patent royalty fee. Apple has accused Qualcomm of unfair patent licensing practices, which forced Apple to pay for the same patent twice; once when the chips were used in the device and again through patent royalties. Qualcomm, in turn, says that their practices are completely legal and that after agreeing to this model for years, Apple is now only seeking to disrupt Qualcomm’s business. Additionally, Qualcomm has also asserted that they have evidence of Apple stealing vast amounts of Qualcomm’s confidential information which includes ways to improve performance on chipsets and handing them over to Intel. The Apple iPhone XS, iPhone XS Max and the iPhone XR all use Intel’s radio chips instead of Qualcomm’s. Apple and Qualcomm’s rift has had far-reaching consequences for the San Diego based chip manufacturer. Last year, Qualcomm went through a tumultuous time due to a loss in revenue from Apple’s business and the continuously escalating legal battle between the two companies. Qualcomm said that it wasn’t just Apple withholding royalties, but also its partners, causing significant loss to the company. In April, the company had said that it was owed $1 Billion in royalties, a number that has grown to $7 Billion now. The company also tackled an aggressive takeover attempt by Broadcom, which had the Qualcomm board in a very tight spot. The takeover was finally shot down by the U.S. Government, citing reasons for national security. Qualcomm’s woes have continued into this year. Along with the escalating legal battle with Apple, Qualcomm also lost out on its acquisition of NXP, a company making chips for autonomous cars, amongst other things. Qualcomm pulled out of the acquisition process after it failed to gain approval from Chinese Authorities, a direct result of the tensions between U.S. and China. Qualcomm definitely faces a tough time ahead, given the current state of affairs. A significant shortfall in revenue coupled up with the fact that Apple’s A12 Bionic chip has raised the bar significantly higher means that Qualcomm has its work cut out for itself with the next generation SoC and radio chips.

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