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The latest lawsuit and sharpening rhetoric will fuel fears on Wall Street that Apple might drop Qualcomm’s modem chips from the next iPhone, as relations between the two companies continue to deteriorate.
Since the beginning of the year, the two companies have become embroiled in multiplying legal fights. Apple accuses Qualcomm of overcharging for its intellectual property and of anti-competitive behaviour. The chipmaker says Apple could not have invented the iPhone without its innovations and, in July, began seeking an import ban against the smartphone in several key markets amid alleged patent infringement.
Wednesday morning brought Apple’s latest response to July’s lawsuit, accusing Qualcomm of infringing on its own battery management patents. Apple says Qualcomm incorporated its power-efficiency inventions into its flagship Snapdragon 800 and 820 processors, which power many leading Android smartphones, including Samsung’s Galaxy S7.
Defending itself against the accusations of patent infringement, Apple’s legal team says the San Diego-based chipmaker has asserted “weak patents that nibble at the edges of the smartphone platform and cover concepts that Apple simply does not use”.
The iPhone maker’s accusation that Qualcomm is behaving like a patent troll — a company that hoards intellectual property without making any real products, generating most of its money from lawsuits — marks a new low in the pair’s relationship.
“This case presents a tale of two companies,” Apple writes in Wednesday’s legal filings. “On one hand we have Apple who literally created the modern smartphone as a product category, with the iPhone’s cutting edge design, easy connectivity, superlative battery life, and interactive applications that make the smartphone the smartphone. On the other we have Qualcomm, who developed rudimentary telephone technology that carried voice calls in the early days of feature phones, but whose technology is dated.”
Apple did not specify the scale of the damages it is seeking over the power-management patent infringement. Qualcomm’s share price has declined sharply since hostilities first broke out with Apple, one of its largest customers, in January.
The stock’s weakness opened the door to an unsolicited $130bn takeover approach from rival chipmaker Broadcom, which Qualcomm’s board has rebuffed as being too low. Broadcom is expected to turn hostile with its approach in the coming weeks, as it prepares to launch a proxy battle against Qualcomm.
Qualcomm did not immediately respond to a request for comment.