Qualcomm held its quarterly conference call on Wednesday, and of course, Apple’s lawsuits against the firm was a popular point of discussion.
Speaking to investors during a call with analysts, Qualcomm CEO Steve Mollenkopf said Apple’s lawsuits, lodged in U.S. and Chinese courts, are less about finding justice than they are getting the best deal on parts, reports CNet.
Apple Wants to Pay Less Than Fair Value
“Apple’s complaint contains a lot of assertions, but in the end, this is a commercial dispute over the price of intellectual property,” Mollenkopf said, following the same plotline as his company’s statement last week on the matter. “They want to pay less for the fair value that Qualcomm has established in the marketplace for our technology, even though Apple has generated billions in profits from using that technology.”
Company President Derek Aberle chimed in, saying: “At the end of the day, they essentially want to pay less for the technology they’re using. It’s pretty simple.” Aberle previously headed up the company’s licensing department.
Apple Says Qualcomm Abused its “Monopoly Power”
Apple filed suit against Qualcomm last Friday, saying the firm’s technology licensing strategy is founded on monopolistic practices, price gouging, extortion, and all the other practices that make for an Oliver Stone movie.
The Cupertino iPhone manufacturer claims Qualcomm has abused its “monopoly power” over the wireless chip market to apply leverage over patent deals, overcharging customers for royalty rates on standard-essential patents. Apple also says the company will only sell chipsets to buyers who also agree to license its SEPs, which Apple calls “double-dipping.”
The basis for Apple’s lawsuit is the nearly $1 billion in licensing payments that the Cupertino firm says Qualcomm hasn’t yet paid. It claims the chipmaker held onto the money after the iPhone maker cooperated with a Korea Fair Trade Commission probe into the chipmaker’s business practices. The KFTC levied an $854 million fine against Qualcomm, saying the company uses an “unfair business model.” The U.S. Federal Trade Commission filed a similar suit against the company last week.
More Lawsuits Filed
Apple filed two more suits against Qualcomm in China on Wednesday, containing allegations similar to the U.S. lawsuit filed last week. The company seeks to collect seeks 1 billion yuan ($145.3 million) in damages based on Chinese iPhone sales in the first lawsuit, while the second pertains to unfair SEP licensing methods.
Apple’s Chip Orders Will be Honored
Although Apple is suing the pants off of Qualcomm, the company says it will honor its existing chip orders. Apple’s chip supply actually comes from contractors who license the company’s intellectual property.
Apple’s lawsuits include references to such contract manufacturers, as the company claims Qualcomm negotiates secret licensing agreements with smaller companies with less bargaining power. Those company as forced to pay “exorbitant” royalties to Qualcomm, and then pass those expenses along to larger companies like Apple, who indirectly pay the royalties via higher prices.