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Apple stops paying Qualcomm royalties amid legal battle

by Danny Zepeda | April 28, 2017April 28, 2017 1:30 pm PDT

The court battle between Apple and Qualcomm is getting nasty. A few weeks ago, Qualcomm claimed Apple suppliers were underpaying iPhone royalties. Now, Qualcomm has revealed that Apple will not pay any royalties pertaining to Q1 sales of iPhones in 2017.

Apple sued Qualcomm for $1 billion over allegations that Qualcomm was charging it for technologies it wasn’t involved with. It also claimed Qualcomm was withholding $1 billion in royalties owed to Apple. Now Apple is responding in kind by not paying its share of royalties, and it doesn’t intend on paying anything as long as the legal battle continues.

Qualcomm has deals in place with iPhone suppliers, so this turn of events will hurt its bottom line. The loss of revenue is impacting Qualcomm’s annual earnings with an expected loss of $500 million. Qualcomm’s financial guidance estimates for the third quarter of 2017, which was pegged between $5.3 and $6.1 billion, has now been dropped down to $4.8 and $5.6 billion. Qualcomm continues to defiantly deny Apple’s claims.

When did the Apple and Qualcomm beef start?

It’s hard to pinpoint a specific date as to when Apple and Qualcomm’s beef began, but there a few important dates that give us a clearer picture. The first was the Federal Trade Commission filing a complaint against Qualcomm for “anticompetitive tactics.”

Apple also decided to use Intel modem chips for the iPhone 7, a move that surely irked Qualcomm as it was its main supplier of modem chips prior to the iPhone 7. That led to Apple’s suit, which was followed by Qualcomm’s counter-suit.

MacRumors

Danny Zepeda

Born and raised in Southern California, Danny grew up on a steady diet Pixar, Star Wars and Steven Spielberg movies. Unbeknownst to him, this was...

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