How Qualcomm Aims to Hit Apple Where It Hurts


Jul. 25 2019, Updated 11:10 a.m. ET

Tensions rising in the Apple-Qualcomm dispute

The ongoing patent dispute between Apple (AAPL) and Qualcomm (QCOM) does not look as if it will end any time soon. In a move that would escalate the already high tensions between the two companies, Qualcomm is now aiming to stop the sale of certain iPhones in the US (SPY).

In a new lawsuit cited by the CNBC, Qualcomm is asking US regulators to block the import of iPhones that infringe on its patents. Remember, Apple produces iPhones through contract manufacturers in China (MCHI) and elsewhere for sales in the US.

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US market is vital for Apple

Since the US is one of Apple’s key markets (QQQ), Qualcomm seems to be aiming to hit Apple where it’s likely to hurt the most in their patent war.

Of the $52.9 billion in revenues that Apple generated in fiscal 2Q17, the Americas region (the largest market) contributed $21.2 billion. The iPhone is Apple’s main source of income, contributing 63.0% of revenues that quarter.

Suits and countersuits continue

In addition to asking for a ban on iPhone imports, Qualcomm is also seeking damages, claiming that Apple has continued to use its technology in its products without paying for it.

Apple has also sued Qualcomm in the US, aiming to get $1.0 billion from the chipmaker for charging it for technology that it has “nothing to do with.” In addition to the dispute with Qualcomm, Apple also had a patent fight with Nokia (NOK), but these two have settled their differences.


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