The Apple-Qualcomm court battle starts today over chip royalties, and billions of dollars could be at stake (via Wall Street Journal—paywall).
Apple vs. Qualcomm
The future of Qualcomm’s business is pretty much at stake.
During opening remarks in front of a nine-person jury about 15 miles from Qualcomm headquarters, Apple’s lawyers are expected to portray Qualcomm as a monopolist that has used its patent portfolio to charge onerous licensing fees of 5% of the sales price of iPhones sold world-wide, up to $400. They also have said the chip company blocked Apple for years from using another supplier of modem chips.
Qualcomm’s attorneys are likely to defend its licensing practices and paint Apple as a bully that is responding to a slowdown in its core iPhone business by forcing Qualcomm to accept less money than it deserves for its contributions to the smartphone era.
In the next few weeks the CEOs of both companies—Tim Cook (Apple) and Steve Mollenkopf (Qualcomm)—will be testifying.
Apple seeks US$9 billion in alleged overpayments to Qualcomm. But if the jury finds that Qualcomm used anticompetitive behavior, that number could rise up to US$27 billion due to U.S. antitrust law.
Meanwhile, Qualcomm seeks US$7 billion in royalties that Apple manufacturers withheld when this legal battle started over two years ago. Qualcomm could argue that Apple encouraged its manufacturers to violate their contracts, and that number could rise to US$14 billion.