Qualcomm (QCOM) Sues Apple In China, Seeks IPhone Sales Ban
Zacks Investment Research | Oct 15, 2017 09:18PM ET
Qualcomm Inc. (NASDAQ:QCOM) recently filed a lawsuit in China against Apple Inc. (NASDAQ:AAPL) to halt sales and manufacture of iPhone in the country, per a Bloomberg report. In a lawsuit filed in Beijing intellectual property court, the largest mobile chipset manufacturer using baseband technology globally, claimed that Apple infringed Qualcomm’s patent and uses technologies invented by it without paying for them.
Qualcomm’s arguments are based on three non-standard essential patents covering power management and Fore Touch touch-screen technology, which Apple uses in its latest iPhones. Qualcomm generates majority of its revenues from mobile chipset manufacturing. However, major part of its profit comes from patent licensing that cover the fundamentals of next-generation mobile phone systems.
On the other hand, iPhone accounts for more than two-third of Apple’s revenues. Importantly, China is the largest smatphone market of the world and a major country for production of these devices. Therefore, any negative court verdict in China could hurt Apple significantly.
Legal tussle between Qualcomm and Apple is not new. In Jan 2017, Qualcomm was slapped with a $1 billion lawsuit related to licensing royalty payments by the tech giant. In the suit filed in the U.S. District Court for the Southern District of California, Apple accused Qualcomm of overcharging for chips and refusing to pay some $1 billion in promised rebates. This lawsuit continues to get bitter, which is badly affecting Qualcomm’s margins.
In May 2017, Qualcomm settled a licensing dispute with BlackBerry Limited (NASDAQ:BBRY) by paying $940 million. Moreover, just a few days ago, the company has been fined around $23.4 billion Taiwan dollars (approximately U.S. $773 million) by the Taiwan Fair Trade Commission on grounds of anti-trust violations of its chip technology.
On the other hand, Qualcomm recently revised its proposed deal to take over NXP Semiconductors N.V. (NASDAQ:NXPI) in order to get the nod from the European Commission (EC), which is the regulatory authority of European Union. Notably, Qualcomm’s proposed acquisition of NXP Semiconductors is facing a few problems.
Price Performance of Qualcomm
Qualcomm’s shares have decreased 6.45% compared with the Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.