QUALCOMM EXPANDS APPLE FIGHT
Chipmaker files suit to ban sale and manufacture of iPhone in China, claiming patent infringement
QUALCOMM Inc filed suits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple Inc so far in a sprawling and bitter legal fight.
The firm aims to inflict pain on Apple in the world’s largest market for smartphones and cut off production in a country where most iPhones are made. The product provided almost twothirds of Apple’s revenue.
Qualcomm filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief, said company spokesman Christine Trimble.
“Apple employs technologies invented by Qualcomm without paying for them,” she said.
Qualcomm’s suits were based on three non-standard essential patents, it said. They covered power management and a touchscreen technology called Force Touch that Apple used in current iPhones, said Qualcomm.
The inventions “are a few examples of the many Qualcomm technologies that Apple uses to improve its devices and increase its profits,” said Trimble.
Apple said the claim had no merit. “In our many years of ongoing negotiations with Qualcomm, these patents had never been discussed,” said Apple spokesman Josh Rosenstock.
Qualcomm made the filings at the Beijing court on September 29. The court has not yet made them public.
“This is another step to get Apple back to the negotiating table,” said Mike Walkley, an analyst at Canaccord Genuity Inc.
There was little or no precedent for a Chinese court taking such action at the request of a United States company, he said.
Chinese regulators would also be concerned that a halt of iPhone production would cause layoffs at Apple’s suppliers such as Hon Hai Precision Industry Co, which are major employers.
Conversely, supporting Qualcomm might help Chinese phone firms such as Guangdong Oppo Electronics Co to gain share against Apple, said Walkley.
Investors aren’t concerned about a disruption to iPhone supply because they believe Apple would immediately compromise if there was any threat to production.
“Apple’s not going to miss one day of production,” he said.
The two companies are months into a legal dispute that centres on Qualcomm’s technology licensing business.
While Qualcomm gets the majority of its sales from making phone chips, it pulls in most of its profit from charging fees for patents that cover the fundamentals of all modern phone systems.
The latest suits come at a crucial time for Apple. It just introduced iPhone 8 and X models aimed at reasserting leadership in a market that’s steeped in competition from fast-growing Chinese makers.
Suppliers and assemblers in China are rushing to churn out as many new iPhones as possible ahead of the key holiday season, so any disruptions would likely be costly.
The Greater China region accounted for 22.5 per cent of Apple’s US$215.6 billion (RM909.83 billion) sales in its most recent financial year. Bloomberg