Qualcomm is facing a legal battle with Apple and it is taking a financial toll on the company’s revenue.
The chip maker posted its fiscal earnings for Q3 2017, reporting a fall of 40% in year-over-year profits. Profit was reported in the last 3 months (ending on 25th June) at $865 million on a total revenue of $5.37 billion which actually fell 11% from last year.
These results were actually better than what was estimated. The $865 million profit in Q3 this year fell from $1.44 billion of last year’s Q3 earning.
The major reason for Qualcomm’s fall in revenues is its on-going law suit with Apple. Qualcomm claims that Apple is using their patented technologies without paying any kind of royalties. Apple’s CEO Tim Cook insists that these technologies have nothing to do with Qualcomm.
Earlier this year in January, Qualcomm got sued by Apple for $1 billion. Apple claimed that Qualcomm was overcharging billions of dollars as part of its illegal business practices.
Foxconn and other Taiwan based contract manufacturers filed a law suit against Qualcomm in the US as well, adding to their troubles. This month Qualcomm counter-sued Apple for patent infringement and is seeking compensation for the iPhone that allegedly uses Qualcomm’s tech.
Apple Interfering With Contracts?
The contract manufacturers are siding with Apple on this case and Qualcomm says that this is more proof that Apple is interfering with contracts.
We have a contract with each of these manufacturers and they have all been paying us consistently for 10 years. At the end of the day, it all boils down to this company, Apple, not wanting to pay for the valuable intellectual property that we provide to them and the rest of the industry. – Don Rosenberg, Qualcomm’s General Counsel
Due to all these on-going law suits, Qualcomm had warned its share holders that its earnings will sharply decrease but it still turned out to be much higher than what was expected.