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Comments Apple and Qualcomm patent fees dispute: a troublesome marriage

06 May 2017 - Apple and Qualcomm
According to "Barron Weekly" Beijing time on May 6 reported that Apple and Qualcomm between the patent fees disputes intensified. Credit Suisse released a report on Friday that Apple and Qualcomm's cooperation is a troublesome marriage, however, the two sides may continue to maintain an interdependent relationship.
Apple and Qualcomm
The following is the report:

According to Bloomberg News, Qualcomm is seeking to the US International Trade Commission (ITC) to apply for a ban on the US imports of Apple's iPhone.

If Qualcomm really do so, then this will be the company's recent refusal to pay royalties for Apple's pay. Last week, Qualcomm lowered third-quarter results, because Apple may stop paying royalties. We believe that the upgrade between Apple and Qualcomm is unprecedented, but not overly upgraded.

Qualcomm said last week that Apple was deducting royalties paid to foundries, which would prevent the founders from paying royalties to Qualcomm. Apple also said the company will continue to do so until the dispute is resolved. As a result, Qualcomm removed royalties from Apple's earnings and lowered its third-quarter results. If Qualcomm really filed an injunction to ITC to ban US imports of the iPhone, it would be the company's retaliation for Apple's payment of royalties to defend its long-term business model.

It is important to note that Apple is not a party to the agreement between Qualcomm and its founders, which has been in existence for 10 years. We can not remember the last time in Qualcomm and the signing of the agreement with the agent can not receive royalties. Historically, this situation is more likely to occur after the agreement expires.

Although this is a troublesome marriage, but the two sides may continue to maintain an interdependent relationship. First of all, in addition to Qualcomm and Intel, in the high-end LTE market to participate in the competition of other companies very few. With the 5G will be deployed next year, Qualcomm's position will become particularly important, because the company almost with all major 5G operators to establish a close alliance.

Second, since Qualcomm announced that the company more than 30,000 patents are "necessary intellectual property rights", Apple did not disclose their specific access to which patents. It now appears that there are 20 patents in dispute. We believe that, in view of Apple's position on cellular intellectual property, the company will continue to pay royalties to standard holders of Qualcomm, Nokia and Ericsson, etc.

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