San Diego-based semiconductor giant Qualcomm is primarily known for, well, designing semiconductor products like LTE modem chipsets and SoCs, but if you look carefully at the company’s financial records of the past few years, you’ll notice a large part of its profit actually comes from the complicated and often ugly business of licensing various patents.
The problem with relying on “partners” for generous regular payments covering the use of copyrighted technologies and intellectual property is that anyone can stop bearing such costs for a number of reasons. And when that someone is Apple, Qualcomm’s earnings guidance inevitably takes a dive.
Under pressure from the FTC, penalized in South Korea, and not exactly comfortable in China either from a legal standpoint, the chipmaker is reportedly seeking a Hail Mary ITC move to potentially negotiate a renewed Apple deal with lucrative terms.
The United States International Trade Commission has the power to ban iPhone imports into the single most important market for the world’s second most popular smartphone vendor. That would effectively put a stop to domestic iPhone sales, since the devices aren’t technically manufactured and assembled locally.
Clearly, that’s not Qualcomm’s end game here, instead trying to strong-arm its leading former collaborator into granting royalties again. The rumored plea with the US trade agency could also be meant as a warning for “other companies or countries” thinking of following Apple’s suit and rejecting a system of licensing fees many consider to be unfair and even illegal. One thing’s for sure – this war is just getting started, rapidly heating up and growing uglier and uglier.