© tom_schmucker dreamstime.com Business | April 15, 2019
The “meat” of Qualcomm’s business model on trial in San Diego
Apple Inc. and its allies square off in a jury trial today against chip supplier Qualcomm Inc. The trial, taking place in San Diego, seeks to determine whether Qualcomm has engaged in illegal patent licensing practices. The plaintiffs are seeking up to USD 27 billion in damages.
In a story filed by Reuters on Friday, and reported on previously in various media outlets, Qualcomm is alleging that Apple forced its longtime business partners to quit paying some royalties and is seeking up to USD 15 billion. Filed in federal court by Apple in early 2017, the lawsuit focuses on the modem chips that connect devices like the iPhone or Apple Watch to wireless data networks. Qualcomm has spent the past two years mounting a pressure campaign of smaller legal skirmishes against Apple, seekingꟷand in some cases winningꟷiPhone sales bans for violating its patents. For Apple, the trial is about the freedom to determine its own technology path for blockbuster products by buying chips without having to pay what it calls a “tax” on its innovations in the form of patent licensing fees to Qualcomm that take a cut of the selling price of its devices. For Qualcomm, the trial, along with similar allegations from U.S. regulators in a January court hearing, will determine the fate of its unique practice of mixing the sale of chips and licensing more than 130,000 patents. Gaston Kroub, a patent attorney with Kroub, Silbersher & Kolmykov, who is not involved in the case, told Reuters, “This is the day of reckoning that Qualcomm has been very fortunate to avoid for many years. In Apple, they’ve finally come up against a potential licensee that has the resources and the will to put Qualcomm’s business model and licensing practices on trial.” At center is Qualcomm’s practice that requires device makers to sign a patents license before it will supply chips, which it views as a commonsense measure to ensure it does not do business with companies violating its patents. Apple and other companies have called the “no license, no chips” policy a form of “double dipping.” In other words, Qualcomm is charging for the same intellectual property once during licensing discussions, and then again in the price of the chips where the patents manifest. Apple and allies are asking for an end to the double-dipping practice and a refund of about USD 9 billion, which may be tripled if the jury finds in Apple’s favor for antitrust allegations concerning contract factories such as Foxconn, who paid the royalties and were reimbursed by Apple. Apple alleges the practices kept Intel Corp. and other rivals like them out of the market for years. “Even very big companies like Intel have felt at a disadvantage,” said Michael Salzman, an antitrust attorney with Hughes Hubbard & Reed not involved in the case. Qualcomm’s position, according to the Reuters report, is that it has successful working relationships with contract factories prior to the release of the Apple iPhone. But Apple leveraged its strength in the industry to persuade factories to break their longstanding contracts with Qualcomm, which led to at least USD 7 billion in royalties lost, the chip supplier alleges. “I don’t think (a Qualcomm victory) would be great for Apple, but if it’s about money, they’ve got plenty of money,” said Stacy Rasgon, an equity analyst for Bernstein who follows Qualcomm. “For Qualcomm, it’s an existential attack on the meat of their business model.”
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II-VI licenses technology for SiC devices and modules for power electronic II‐VI Incorporated has singed an agreement with General Electric to license GE's technology to manufacture silicon carbide (SiC) devices and modules for power electronics.
Dialog Semi completes its acquisition of Adesto Dialog Semiconductor says it has completed the acquisition of Adesto Technologies Corporation (Adesto)), a provider of custom ICs and embedded systems for the IIoT market.
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USI breaks ground on its new Huizhou manufacturing facility The electronics designer and manufacturer is looking to reinforce its foundation in Southern China and is doing so by adding a new manufacturing facility in Huizhou (Guangzhou, China).
R&M opens U.S. production facility The 10,000-square-foot facility in Elkridge, Maryland aims to services U.S. East Coast, Southern and Midwestern customers with consulting, production, support, and rapid delivery.
Osram: Slight recovery after weak 3rd quarter expected Osram Licht AG expects for the fiscal year 2020 a comparable revenue decline of -15 to -19 percent (previously:-3 and +3 percent), an adjusted EBITDA margin of 3 to 6 percent (previously: 9 to 11 percent) and a negative free cash flow in the mid double digit to lower triple digit million range.
Taiwan edges South Korea as largest base for IC wafer capacity China capacity expansion forecast to push the country into second place in the regional rankings in 2022, trailing only Taiwan in size.Load more news
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