Qualcomm CEO on its global legal war with Apple: ‘It will get resolved’

In the escalating global legal war between Qualcomm and Apple, the tech giants are planning to spend billions of dollars and use any regulatory tricks possible to upend the other.

But according to Qualcomm CEO Steve Mollenkopf, the feud is a mere “dispute” with an expiration date.

During an interview at the Wall Street Journal’s D.Live tech conference in Laguna Beach, California, Mollenkopf downplayed the scale of his fight with the Cupertino tech giant.

“I think we’ll get through it, we have a very strong product relationship with (Apple),” said Mollenkopf. “We sometimes have these disputes, but you have a broad relationship.”

As for what will happen to the dispute, Mollenkopf believed “it will get resolved” at an unknown date.

For years, the Apple-Qualcomm dispute flew below the radar, likely because of its rather confusing history and what is at stake: a wireless modem installed into every iPhone.

Since the first iPhone, Qualcomm has supplied Apple with wireless modems. In return, the San Diego-based microchip giant received a handsome royalty payment from Apple — as high as $30 per iPhone sold.

“In the end it’s important to remember is that fundamentally this is a discussion about pricing over the fundamental technology that makes the phone,” said Mollenkopf at the conference.

Apple paid Qualcomm royalties for years. That changed in 2015, when Apple began working with Intel to develop a modem that was used in some versions of the iPhone 7.

The first salvo in this feud was fired in South Korea in December 2015, when its antitrust regulators slapped Qualcomm with a  $853 million fine over monopolistic actions against tech companies such as Samsung. (Bloomberg reportedly says Tim Cook coaxed Samsung CEO Jay Y. Lee to get the Korean regulators involved.)

The next month, the U.S. Federal Trade Commission followed suit. Three days later, Apple sued Qualcomm, accusing Qualcomm of extorting Apple with high royalties.

Last April, Apple escalated by cutting its royalties to Qualcomm. In July, Qualcomm sued back, claiming copyright infringement and seeking a ban on importing iPhones built with Intel chips into the United States.

Last week, Qualcomm launched a new lawsuit against Apple in China, seeking to ban the sale and manufacturing of iPhones in the country.

“Apple believes deeply in the value of innovation, and we have always been willing to pay fair and reasonable rates for patents we use,” said Apple in a statement after the China lawsuit. “Regulators around the world have found Qualcomm guilty of abusing their position for years. This claim is meritless and, like their other courtroom maneuvers, we believe this latest legal effort will fail.”

Despite the heated words and lawsuits, Apple and Qualcomm maintain a business relationship, as Mollenkopf said. For example, the wireless technology for the new Apple Watch, which gives it LTE capabilities, is powered by a Qualcomm modem.

Qualcomm also is hoping to win over Apple with superior technology. On Monday, Qualcomm announced it made its first 5G connection on a mobile device, which allows mobile internet speeds of 1 gigabyte per second. While some doubt Qualcomm’s claim, a 5G network is expect to be much faster and more expansive than the current LTE and 4G networks available.

Photo: A sign sits atop the Qualcomm headquarters building in San Diego in 2011.  (Gregory Bull/AP)

 

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  • Pepeboy1

    Mollenkopf, I have defended Qualcomm for well over a year and doubled down on my investments in QCOM. If the difference with Apple is that simple; stop pissing away your shareholder’s money and settle or I am out!

 
 
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