Published: Sat, October 14, 2017
Research | By Raquel Erickson

Qualcomm Lawsuits Seek Crippling Apple iPhone Production And Sales Ban In China

Qualcomm Lawsuits Seek Crippling Apple iPhone Production And Sales Ban In China

The San Diego-based chipmaker is apparently aiming to hurt Apple in the world's largest market for smartphones and cut off production in a country where majority of iPhones are manufactured. The product provides nearly two-thirds of Apple's revenue.

In its lawsuit, Qualcomm reportedly claims that Apple is in violation of three patents, none of which are essential to any industry standards - meaning Qualcomm isn't obligated to license them. The Cupertino company has historically used Qualcomm's modems in its phones, though it's recently switched to Intel chips for that goal. "Apple employs technologies invented by Qualcomm without paying for them", a Qualcomm spokesperson told Bloomberg.

Apple is now rushing to manufacture as many iPhone 8, 8 Plus and iPhone X models during its busiest sales period of the year.

It seems exceedingly unlikely that sales of any iPhones will be banned. The Greater China region accounted for 22.5 percent of Apple's $215.6 billion sales in its most recent financial year.

Late last month, Qualcomm filed a suit in Beijing intellectual property court claiming that Apple infringed on its patents. It's been repeatedly fined for similar behaviors, with the latest ruling coming down yesterday, when it was fined $774 million by Taiwan's Fair Trade Commission. Qualcomm is also asking US authorities to ban the import of some versions of the iPhone, arguing they infringe on its patents. The deal now in place still requires that Apple pay a fee regardless of whether the phone includes a Qualcomm chip, though.

Soon after its first legal salvo, Apple cut off licensing payments to Qualcomm. Apple shares are up 36 percent this year.

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