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Apple

Apple says China iPhone ban would force settlement with Qualcomm

  • The companies are locked in a worldwide dispute over licensing fees that Qualcomm charges for use of its technology
PUBLISHED : Friday, 14 December, 2018, 10:46am
UPDATED : Friday, 14 December, 2018, 12:22pm

Apple Inc. said a Chinese ban on the sale of some models of the iPhone will force it to settle a long and bitter licensing battle with Qualcomm Inc., according to a recent legal filing.

Earlier this week, a court in China ruled that Apple is infringing two Qualcomm patents and issued injunctions against the sale of six versions of the iPhone in the country. Apple said on Monday it had filed a request for reconsideration with the court.

“Apple will be forced to settle with the Respondent, causing all mobile phone manufacturers to relapse into the previous unreasonable charging mode and pay high licensing fees, resulting in unrecoverable losses in the downstream market of mobile phones,” the iPhone maker said in the December 10 filing to the court. The document was submitted in Mandarin with an English translation.

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Apple did not respond to a request for comment. The technology giant has given no indication that it intends to settle with Qualcomm. The filing shows how important the US company is to the Chinese economy, and vice versa.

The ban would cost Apple millions of dollars a day and affect both the Chinese government and consumers, the company added, noting it has created 5 million jobs in China across the supply chain and third-party software developers.

The Chinese government “may suffer hundreds of thousands of tax losses” from the iPhone ban because of lost taxes from sales of the devices, the company also said, citing estimates of 50 million units sold in the country in 2017.

Apple also warned that the ban would hurt Chinese manufacturers like Foxconn and suppliers.

“Apple and many other companies, consumers, and government will suffer truly irreparable harm,” the company said in the filing.

The two US companies are locked in a worldwide dispute over licensing fees that Qualcomm charges for use of technology that the chip maker says underpins all modern phone systems. Apple has argued that its former supplier unfairly leverages its position as the biggest supplier of chips for smartphones to force payment of the fees. Qualcomm has countered that Apple is using its intellectual property without paying for it and the legal cases are aimed at forcing it to lower licensing charges.

Qualcomm has brought patent suits in China and other jurisdictions seeking bans on the sale of iPhones to force Apple to the negotiating table.