Apples Testifies That Qualcomm Declined To Sell It Chips

Apple says that it intended to use Qualcomm modems for its iPhone XS, iPhone XS Max, and iPhone XR; however, Qualcomm declined to sell them its chips. Qualcomm’s reaction was because of Apple’s lawsuit over its licensing practices.

Today, Apple COO Jeff Williams testified to the US Federal Trade Commission that in the end, Qualcomm didn't support or sell chips to the company. Instead, the company had to use LTE chips from Intel.

Apple COO Jeff Williams

Currently, Qualcomm is on trial, facing the accusation of monopolistic actions including charging abnormally high licensing fees, not licensing patents to other chip producers, and pledging deals to clients (like Apple) under the condition that it used Qualcomm chips exclusively.

Although it seemed that Apple initially changed to use Intel chips exclusively for spite and competitive causes, in court, the iPhone maker denied that. Williams explained that the company initially wanted to place half of its order at Qualcomm and the rest at Intel. Then when Qualcomm didn’t sell it chips, they had to turn to Intel.

Since Intel will not release 5G chips before 2020, this may seriously block Apple’s plan to make and sell 5G iPhones. Moreover, Intel’s LTE modems are slower than those of Qualcomm. Previously, when Apples was still buying chips from both Intel and Qualcomm, it had to slowdown Qualcomm’s chips so that every iPhone ran at the same speed.

William also revealed how much Apple has been paying Qualcomm: $7.5 per device, while Apple wanted to pay only one-fifth of that, $1.5 per device. Williams continued by saying Apple did not have the option to sue Qualcomm as it would lose its major chip provider.

The conflict between two companies began in 2017 when the iPhone maker filed a lawsuit against the chip maker over licensing terms. Qualcomm stroke back by suing Apples for infringing its patents as well as providing its information to Intel.

In October 2018, Qualcomm said Apple owes a total royalty payment of $7 billion. Furthermore, the giant chip maker took the lawsuit to international courts in China and Germany, successfully persuading the judges to ban the company from selling some of its iPhones in the countries.

In Germany, Apple had to recall all of its iPhone 7 and 8 from its retail stores and third-party sellers. In China, it had to update software on its iPhones to avoid sales ban, except for the latest models.