Not only Google’s Waymo and ride-hailing giant Uber, but Qualcomm and Apple are also currently embroiled in an ongoing patent royalties payment battle of their own. And now, Qualcomm is planning to retaliate against Apple by paralyzing the import and sale of the widely popular iPhone in the United States, reports Bloomberg. The chipmaker, whose business and revenues have been affected by Cupertino’s decision, is seeking the support of a U.S trade agency to completely ban the import of devices using its components.
Citing sources aware of the development, the publication reports that Qualcomm is currently prepping to ask the International Trade Commission (ITC) to place a ban on the import of iPhones — manufactured in Asia — within the country. Since Apple has decided to forego their long-running relationship (or contract) with Qualcomm, the chipmaker is also resorting to such tactics that will place the iPhone under a blockade and stop them from being imported from Asia to the U.S in the coming months.
Instead of approaching the usual federal district courts, the chipmaker is heading straight for the Washington-based ITC because it is a quasi-judicial agency that holds the power to block the import of goods into the U.S. And just not that, the decision-making process for the ITC is even quicker than the traditional courts, which help resolve theft, falsifying or even antitrust issues.
Speaking on the possibility of a worldwide ban on iPhone sales, Apple Chief Executive Tim Cook stated in yesterday’s earning call,
That’s both the price and the business terms. Qualcomm has not made such an offer to Apple. I don’t believe anyone’s going to decide to enjoin the iPhone based on that. There’s plenty of case law about that subject. But we shall see.
Though Qualcomm has currently only approached the U.S authorities and no such decision has received official confirmation, so the iPhone maker doesn’t exactly have anything to worry about at this instant. But, the International Trade Commission, the authority that has the right to restrict imports of goods that violate intellectual property rights, could block the sale of iPhones at a rather crucial time for the company.
Qualcomm is planning to strike the hammer when the iron is really hot and that is now because Apple is expected to debut three new iPhone devices – one with a complete design overhaul – in the coming months, around September. This could further damage Apple’s sales, which have already been affected this quarter due to rumors of the upcoming iPhone 8. The device is not only expected to bring along OLED display with True Tone capabilities but also introduce AR capabilities to its front, as well as rear camera snaps.
As for the escalating legal battle, it started out when Apple filed a surprising billion dollar lawsuit against the American chipmaker — Qualcomm for charging them unfairly for the patents they had nothing to do with. These claims followed pursuit to a couple other charges for unfair trade practices across the globe — in China and South Korea. It has then called out Apple for mischaracterising their agreements and negotiations, thus, terming the claims as baseless.
The legal battle between the two technology giants moved a step further when the Cupertino behemoth decided it will stop spending billions of dollars in royalty payments until its dispute with the chipmaker is resolved. But, this situation escalated when Qualcomm filed a countersuit against the iPhone maker because it was interfering with the chipmaker’s contact with third-party manufacturers and suppliers. This has pushed Qualcomm to down on its
This has further pushed Qualcomm to down on its third quarterly revenues guidance to a range of $4.8 billion to $5.6 billion, down from $5.3 billion to $6.1 billion — removing the contribution of patent royalties from Apple and its suppliers. It is a staggering $500 million reduction from the previous prediction — which were reported before the matter had escalated to the current level.
In addition, Qualcomm is seeking damages from Apple for wrongly accusing it of unfair trade practices, harming its business, and breaching their long-running contract. The chipmaker has detailed the value of its technologies, innovation, and licensing program which has enabled others in the industry to fairly employ the same capabilities in their devices.
The blockade on the import of the iPhone is essentially possible because Apple itself had blocked a handful of Samsung phones from being imported into the country over alleged infringement of two patents. These premium devices are designed in Silicon Valley but the manufacturing and assembly takes place in Asian countries — prominently China. We have contacted both Apple and Qualcomm for updates and haven’t heard back from them as of yet.