The Apple vs. Qualcomm patent fight is probably the second most important new legal confrontation between tech companies this year, with the Google vs. Uber trial being far more interesting and dramatic. But you had still better be ready for the incoming spectacle. Case in point: Qualcomm on Friday issued a press release to tell everyone in the world that Apple has been a bad, bad company.
Titled Apple Continues to Improperly Interfere with Qualcomm’s Agreements with Contract Manufacturers, the new statement is about Qualcomm’s revised guidance for the third quarter in light of Apple’s recent actions. Needless to say, this fight stands to have a dramatic impact on Qualcomm’s performance.
Apparently, Apple told Qualcomm that “Apple is withholding payments to its contract manufacturers for the royalties those contract manufacturers owe under their licenses with Qualcomm for sales during the quarter ended March 31, 2017,” and it will continue to do so until the patent dispute is settled.
As a result, Qualcomm now expects revenue between $4.8 billion and $5.6 billion for the third quarter. Its prior guidance was between $5.3 billion and $6.1 billion. Comparatively, Qualcomm reported $6.0 billion for the third quarter of fiscal year 2016. In other words, iPhone money is really important to the chipmaker.
“Apple is improperly interfering with Qualcomm’s long-standing agreements with Qualcomm’s licensees,” executive vice president and general counsel of Qualcomm Don Rosenberg said.
“These license agreements remain valid and enforceable. While Apple has acknowledged that payment is owed for the use of Qualcomm’s valuable intellectual property, it nevertheless continues to interfere with our contracts. Apple has now unilaterally declared the contract terms unacceptable; the same terms that have applied to iPhones and cellular-enabled iPads for a decade. Apple’s continued interference with Qualcomm’s agreements to which Apple is not a party is wrongful and the latest step in Apple’s global attack on Qualcomm. We will continue vigorously to defend our business model, and pursue our right to protect and receive fair value for our technological contributions to the industry.”
Things are definitely going to get interesting…