Days ago, Apple’s COO; Jeff Williams – appeared before the court testifying that Qualcomm has not been offering support to their new iPhone design. According to AppleInsider, Williams claims that it has been a challenge to move forward with the production of their upcoming 5G-equipped iPhones – US Federal Trade Commission versus Qualcomm hearing.
The story so far
According to reports, Williams had made contact Qualcomm’s CEO, Steve Mollenkopf to try and strike an agreement; which will require the chip maker to supply its 5G modems to Apple. Reports further detail that Steve declined the deal nonetheless, forcing Apple to turn to Intel for the supply of its 2018 iPhone series.
Apple’s defense argument
In his defense, Williams said,
“The strategy was to dual source in 2018 as well. We were working toward doing that with Qualcomm, but in the end, they would not support us or sell us chips.”
While Qualcomm still refuses to supply its chips and issue permit the tech for the 2018 iPhone lineup; the chip maker continues to supply for the older Apple devise. In line to the facts, Williams was questioned whether Qualcomm is being abusive from a business perspective. He was further asked to explain why Apple still holds onto the partnership, even after the licensing fee; as well as the disputative double income, started going up in stealth.
In Apple’s defense, they observed a $1 billion increase in the licensing fee annually, so they decided to they were already stuck in the partnership with Qualcomm, CNET reports. William further adds that they were bound to the deal and the only alternative they had was to accept; otherwise it will go back to the original rates Qualcomm had demanded – $18, $17. According to Williams, Apple needs Qualcomm’s chip supply and argues that if they had tried to take on them legally; then they would be denied access to the chips.
“We didn’t have a lot of options,” he concluded.
Qualcomm’s past illegal misdeeds
A report published by AppleInsider in 2017, details an FTC suit that was activated the same year. The suit condemned Qualcomm of bullying Apple into an exclusive modem chip contract between years, 2011 and 2016. The alleged deal that was forcefully signed, meant that Qualcomm will enjoy royalties from Apple’s lower patents. Qualcomm has cultivated a negative reputation of receiving royalties from several key smartphone-related patents. The chip giant manufacturer has also been accused of failing to honor the FRAND (Fair, Reasonable, and Non-Discriminatory) pricing.
Moments cultivating to the FTC suit action, Qualcomm had been served with a record $ 853 million fine in South Korea for taking part in similar acts, AppleInsider reported. The action made Apple bold enough to file a $1 billion suit against Qualcomm, for withholding recouping rebates.
Meanwhile, the cold war between Apple and Qualcomm has recently surfaced with lawsuits and countersuits all over the globe. For instance, according to Qualcomm, Apple has been failing to issue royalty payments. The chip giant has also criticized Apple for various patent violations and its vile practices of sharing trade secrets to its rival chip maker, Intel; who are the current chip suppliers for iPhone modems.
While Apple might have had a strong position in the deal, that changed recently when Qualcomm succeeded in securing limited iPhone bans in China, and Germany. And while these bans only affect Apple’s older models, the chip giant hasn’t had enough luck to stop the sale of iPhones in the US market yet.
During CES 2019, Steve Mollenkopf, took to the stand, to justify the pricing culture of Qualcomm, arguing that Apple had forced them into a $1 billion incentive payment for the success of the deal – that was despite the chip giant pushing for exclusive access to iPhones.
To date, the battle continues, and only time will announce the winner.