Four Apple suppliers get dragged into Qualcomm conflict

money Apple apparently wants its
manufacturers to withhold payments to Qualcomm.
Photo: Ste Smith/Cult of Mac

Qualcomm has filed a complaint against manufacturers Foxconn,
Pegatron, Wistron and Compal as part of its ongoing conflict
with Apple.

In a statement
given today, Qualcomm noted that while iPhone
makers Foxconn, Pegatron, Wistron and Compal don’t dispute
“their contractual obligations to pay for the use of Qualcomm’s
inventions, the manufacturers say they must follow Apple’s
instructions not to pay.”


Apple
recently reportedly
decided to withhold royalty payments
from Qualcomm for
sales made in the first quarter of 2017. By doing
so, Qualcomm was forced to revise its earnings forecasts
to give a smaller number, due to Apple cutting off one of its
major sources of revenue until their dispute is resolved.


The relationship between Apple and
Qualcomm — which produces the wireless chips used in
various Apple devices — went south earlier this year
after Apple filed a
$1 billion lawsuit
against the chipmaker.

According
to Apple, Qualcomm has been charging charging royalties on
technology it does not own. Qualcomm then hit
back with a lawsuit of its own
, claiming Apple is
misleading and has breached its contract with the company.
A couple of weeks ago it was reported that Qualcomm next plans
to
seek a ban on Apple importing iPhones
into the United
States.


Qualcomm
and Apple are both tech giants in their own right, but Qualcomm
has so far come off considerably worse in the
standoff. Shares in the company fell 14 percent
within days of the Apple lawsuit being announced, and
discussion of the dispute dominated the entire first 20 minutes
of Qualcomm’s most
recent earnings call
.


Now it
seems as if Apple suppliers are being dragged into the
conflict, too. Given that Apple is not only allegedly refusing
to pay its own share of royalties to Qualcomm, but also
instructing its contractors to do the same, it will be
fascinating to see where things go from here.

Source:
Reuters




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