Earlier this week, the (already unstable) relationship between Apple and Qualcomm suffered even more concussions. As we mentioned, the chip maker requested an end to import and a ban on the iPhones 6s, 6s Plus, 7, 7 Plus, 8, 8 Plus and X from China for infringing two company patents and then placed an order for them to be included XS, XS Max and XR.
As you can imagine, Apple did not like this one bit. Following the request made by Qualcomm in the courts, the company warned that maintaining the ban would cause ?irreparable damage? not only to the company, but also to suppliers and even consumers, as disclosed by Bloomberg.
In addition, a possible ban on these gadgets could give the impression that Apple would be ?subject to Qualcomm's terms?, causing other cell phone manufacturers to fall back on the previous charging method and pay high fees. royalties, resulting in irrecoverable losses for the smartphone market.
As we said, Apple stated that the ban would also harm manufacturers in the country, such as Hon Hai / Foxconn Technology Group and other companies after all, China is also the production base for most iPhones, iPads, Macs and Apple Watches.
Of course, such a ban would cost Apple millions of dollars a day, which would therefore also affect the Chinese government, with the loss of tax on sales of iPhones. In 2017, about 50 million units of the device were sold in the country.
To solve this problem, or by trying to alleviate it, Apple announced last night that launch a software update next week to resolve any possible patent infringement, as disclosed by Reuters.
Based on the iPhone models we offer today in China, we believe we are in compliance. At the beginning of next week, we will deliver a software update for users of iPhones in China, correcting the functionality of the two patents in question.
This means that, despite Ma's efforts to get the devices installed with iOS 12 off the straight, Qualcomm remains firm in its positioning (and seems to get what it wants). Further details about the update are not yet available; according to AppleInsiderIt is also unclear whether iPhone owners will be forced to download the update.
Apple released earlier this week the first beta of iOS 12.1.2, which should be officially launched only in January. Therefore, it is likely that the Cupertino giant will release an emergency update for Chinese iPhones (not the one currently being tested).
Concomitantly with Ma, it will also be necessary to act more sharply in the production of iPhones. In this sense, the Nikkei informed that the company could transfer part of the production of this gadget to Pegatron, a Taiwanese manufacturer and automaker partnering with Apple, to escape the possibility of a ban in China.
As explained by Nikkei, each iPhone maker has its own patent license with Qualcomm, conducting these negotiations independently. Accordingly, Pegatron's contract covers a larger portion of Qualcomm's technology catalog than the agreements signed by Foxconn and Wistron.
Pegatron even has a licensing agreement with Qualcomm that covers the two patents that originated this problem. Apple believes that if Pegatron's workforce is strengthened, it could replace, in part, the number of devices assembled by other companies.
Despite this, the report said that Apple is at the beginning of the talks with Pegatron and that it is analyzing whether the company could handle receiving more manufacturing orders. In addition, of course, this possible replacement does not happen overnight, but the fact is that Apple is using all legal tactics to delay or reverse Qualcomm's tax.
Federal Trade Commission
In addition to the unfolding of the case between Apple and Qualcomm in China, there were also news of the imbroglio between the chip maker and the Cupertino giant in the USA, related, more specifically, to the complaint of Federal Trade Commission (FTC) on Qualcomm's anti-competitive business practices.
After accusing Ma of supplying Intel industrial secrets, federal judge Lucy Koh decided that Qualcomm will not be able to use evidence from Apple's switching suppliers (such as Intel) to counter claims of monopoly and billing. royalties abusive as disclosed by Reuters.
Qualcomm argued in court documents that the ?new market conditions would show that it does not hold the monopoly on modern chips? the FTC's claim. Koh rejected the chipmaker's argument and said the case was about Qualcomm's business conduct and not about its market power.
If the FTC wins this case, regulators in different countries could impose fines and force the manufacturer to change some of its business practices around licensing and charging for services. royalties of its technologies that guarantee more company profits than the sale of chips themselves.