Qualcomm, Inc. (NASDAQ:QCOM) responded to Apple Inc.’s (NASDAQ:AAPL) lawsuits by filing its “Answer and Counterclaims” on Tuesday. Still, that didn’t do much to stem its recent bleeding; QCOM shares were down more than 2%.
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The chip maker alleged that the iPhone maker refrained from exploiting the full potential of its chips in the iPhone 7 on purpose so that they lack in performance compared to the models running on Intel Corporation (NASDAQ:INTC) chips.
Apple “Threatened” Qualcomm to Keep Quiet
In a 139-page long suit, Qualcomm stated that Apple “chose not to utilize certain high-performance features of the QCOM chipsets for the iPhone 7 (preventing consumers from enjoying the full extent of Qualcomm’s innovation).” When the chips reportedly outperformed Intel’s, the iPhone maker allegedly claimed falsely that there was no significant difference between the two chips.
Further, the chip maker stated that Apple has not even revealed to customers the extent to which Qualcomm’s chipsets fare better than Intel’s chipsets. It also alleged that the iPhone maker threatened it to be quiet about the performance differences.
The chip maker’s response states that it would not have been possible for Apple to create the iPhone franchise that has made it the most profitable entity in the world “without relying upon Qualcomm’s fundamental cellular technologies. Now, after a decade of historic growth, Apple refuses to acknowledge the well established and continuing value of those technologies,” the chip maker claims.
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QCOM stated that it is quite clear AAPL is looking to force it into accepting less value for the patented technologies that have fueled the innovation in cellular technology and enabled Apple to generate over $760 billion in iPhone sales. The chip maker stated that it has put over $40 billion into research and development over the past three decades and has a staff of over 20,000 engineers. The chip maker has a patent portfolio of over 130,000 issued patents and patent applications around the world.
Qualcomm Practicing Unfair Trade Tactics
Qualcomm also mentioned in the lawsuit that Apple breached their contract by meddling with the agreements and relationships that it (QCOM) had with other contract manufacturers. The lawsuit also claims that the iPhone maker is not paying the money due under a contract related to a high-speed feature of the company’s chip.
In its lawsuit filed in January, Apple stated that Qualcomm is misusing its monopoly status in cellular chips and pushed forward “onerous, unreasonable and costly” terms and conditions for customers and competitors. Further, Cupertino-based AAPL stated that the chip maker has charged excessively for its patents and also did not sell the chips to phone manufacturers that refused to license its patent portfolio.
The U.S. firm has sued the chip maker in China and the U.K. also.
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In recent years, the chip maker has been facing a lot of inquiry over its alleged monopolistic practices.
Just two years ago, the company paid China approximately $1 billion to close the 14-month antitrust investigation, notes CNET. In December, South Korea slapped the chip company with a $580 million fine, accusing it of having an “unfair business model” and creating a monopoly with its practices.
The U.S. Federal Trade Commission (FTC) also alleged that Qualcomm has dominated the cellular chip market illegally.
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