Recent Events Shaping the US Software Industry

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Part 6
Recent Events Shaping the US Software Industry PART 6 OF 12

A Look at the Qualcomm–Apple Dispute

BlackBerry receives $815 million in refunds

Apple (AAPL) is digging in for what could be a prolonged legal fight with Qualcomm (QCOM). Besides covering legal expenses for its associates rgar have sued Qualcomm, Apple also decided to consolidate its suit and that of its associates to face off with Qualcomm as a combined force.

Apple’s contract manufacturers include Foxconn, which assembles iPhones, that have alleged in their court documents that Qualcomm is overcharging them for patent licenses. Additionally, they believe that Qualcomm’s licensing practices are at odds with antitrust regulations. Apple, which filed its suit against Qualcomm earlier, alleged excessive license fees and is demanding $1.0 billion in refunds from Qualcomm.

BlackBerry (BBRY) earlier this year recovered $815 million in refunds from Qualcomm to cover overpayments for patent licenses.

A Look at the Qualcomm–Apple Dispute

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Qualcomm’s claims against Apple

Qualcomm has also made several claims against Apple, including that the iPhone maker breached their agreement when it testified against it in a case in South Korea. Qualcomm was fined more than $850 million as a result of that case.

Exerting pressure on rival

As part of the attempts to put more pressure on Apple to speed up the settlement, Qualcomm has sought to block the import and sale of the latest iPhones in the US (SPY) and Germany (EWG). As shown in the chart above, the iPhone is Apple’s primary source of revenues, and interfering with its sale can have a profound impact on Apple’s financial performance. Meanwhile, technology licensing is Qualcomm’s largest source of profit, and problems in the business can cause Qualcomm a lot of pain.


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