Apple was once one of Qualcomm’s best customers, using its wireless modem chips in all iPhones, but the two companies have come increasingly into conflict since the beginning of last year, when Apple sued Qualcomm for charging what it deemed to be excessive royalties. Apple stopped paying the fees and subsequently has shifted to modem chips from Intel for newer iPhones. Qualcomm countersued Apple and has sought a ban on imports of iPhones containing Intel chips.
In its latest filing, Qualcomm (QCOM) said Apple (AAPL) has been helping Intel (INTC) improve its modem chips by improperly sharing Qualcomm’s confidential information and trade secrets.
“Beginning at least several years ago,” Apple engineers “repeatedly accessed, used, and provided to Intel engineers Qualcomm software and confidential information, including source code, for the purpose of improving the performance of Intel’s chipset solutions,” Qualcomm said in its new filing. The filing did not include specific evidence, such as quotes from emails, however.
“Unlawful use of Qualcomm’s valuable trade secrets to try to help a competitor catch up irreparably harms us and must not be allowed to continue,” Qualcomm general counsel Donald Rosenberg told CNBC.
Apple declined to comment. The company has denied all of Qualcomm’s charges in court and filed a motion to compel its legal foe to provide evidence for its more explosive claims.
Shares of Qualcomm, which had gained 18% so far this year, lost almost 1% in midday trading on Tuesday. Apple shares, already up 32% in 2018, were up about 1%.
The performance of Intel’s modems has improved rapidly, analyst Ryan Shrout of Shrout Research notes. “Qualcomm believes this is a result of Apple’s actions, laid out in this court document,” Shrout said. “This claim is significantly more dramatic than anything related to the patent lawsuits or business model complaints of either party previously.”