A bitter feud between Apple and Qualcomm over royalty payments is threatening to get out of hand. Reports indicate that the chip giant is considering asking the International Trade Commission to block iPhone sales in the U.S over the dispute.
Apple-Qualcomm Royalty Standoff
The dispute is in relation to Apple’s move to start using Intel’s chips at the expense of Qualcomm which has been its main supplier. Apple made the unprecedented switch on becoming tired of Qualcomm’s practice of charging a percentage for every smartphone it sells regardless of them having the chip giant chips.
Apple sued the chip giant in January arguing that the royalties were expensive. Qualcomm hit back with its own lawsuit alleging that the iPhone maker turning to Intel was a breach of contract and that it was harming its business.
The International Trade Commission will now have to decide on whether Apple did indeed violate Intellectual Property rights as alleged by Qualcomm. If found guilty, the iPhone maker may be blocked from importing devices developed abroad to the U.S.
This is not the first time that the agency has been forced to make a ruling on such a high profile case with serious repercussions. Back in 2013, the agency blocked Samsung from selling some of its phones in the U.S after Apple alleged they infringed on two of its patents.
Apple-Samsung Unending Feud
The two tech giants have been at each other throats this year Apple having already stopped paying royalties for Qualcomm’s wireless technologies included in its devices. The chip giant says the iPhone maker is yet to pay $500 million in royalty fees accrued in the second quarter. It now appears that the chipmaker has grown out of patience thus the move to block iPhone imports to the U.S.
Qualcomm generates a good amount of its revenues from the business of licensing technologies to handset makers. Given that Apple through its contract manufacturers is one of the biggest manufacturers in the world, any standoff with it always goes a long way to hurt its revenue stream. A slowdown in iPhone sales in the recent past also appears to have had a ripple effect on Qualcomm’s lucrative business.
Qualcomm has seen its sentiments in the market turn sour this year, its stock having already shed 16% in market value. Standoffs with regulators around the world also continue to spook investors.