Qualcomm CEO Expects Out of Court Settlement With Apple
Qualcomm CEO Steve Mollenkopf compared the dispute with Apple over potentially billions of dollars in royalties on mobile chipsets to earlier fights Qualcomm has had over the years with other tech companies that were settled out of court.
“There’s not really anything new going on,” Mollenkopf said speaking at the Brainstorm Tech conference in Aspen. About the Apple dispute, he explained “those things tend to get to resolved out of court and there’s no reason why I wouldn’t expect that to be the case here.”
But Mollenkopf said he didn’t have any specific news announcing a settlement was on the way. “I don’t have an announcement or anything so please don’t ask,” he said.
The dispute between the two companies broke out after Apple started using modem chips from Intel (INTC) in about half of new iPhones last year, instead of buying all its chips from Qualcomm.
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Then Apple filed suit against Qualcomm in the United States and China in January and aided regulators at the Federal Trade Commission and the Korea Fair Trade Commission in moving against the chipmaker with their own legal actions. In April, Apple stopped paying its iPhone manufacturers for royalties owed to Qualcomm.
According to Apple’s lawsuits, Apple may pay the same royalty rates—or more—for iPhones that don’t use Qualcomm chips. Apple argues that Qualcomm has abused its dominant position for mobile communications chips to charge excessive royalties, with the rates calculated based on the overall value of a phone, not just the price of the communications components. But Qualcomm says its percentage take is perfectly legal and helped fuel the many innovations it brought to market.
Qualcomm counter-sued in April, accusing Apple of harming its business and breaching deals between the two companies. Qualcomm says its licensing agreements are fair and legal, pointing to a 2015 agreement with Chinese regulators and its hundreds of active license agreements with other manufacturers.
A few weeks ago, Qualcomm escalated the fight, filing a new patent infringement lawsuit and seeking to have imports of some iPhones and iPads banned from the U.S.
The company asked U.S. International Trade Commission to ban imports of all iPhones and iPads that contain competing mobile communications chips. About half of all iPhones now contain wireless modem chips made by Intel. Qualcomm (QCOM) said it could take up to 18 months for the ITC to act on its complaint, so upcoming new Apple (AAPL) iPhones expected in the fall wouldn’t be blocked.