Qualcomm Accuses Apple of Phone-Chip Software Contract Breach

Apple Is Said to Design iOS Devices Without Qualcomm Parts

Bloomberg reports that Qualcomm (NASDAQ:QCOM) filed a new lawsuit against Apple (NASDAQ:AAPL) yesterday accusing the iPhone maker of using its chip software access to benefit Intel (NASDAQ:INTC). According to Qualcomm, Apple representatives in July requested "highly confidential" information about how the units work with an unidentified wireless carrier's network.

The contract Apple allegedly broke surrounds software created to make Qualcomm chips work with other iPhone components, Bloomberg first reported.

The latest lawsuit, which was filed in California state court, comes days after Bloomberg had reported that Apple is designing the latest iPhones and iPads without Qualcomm parts. If Apple did share code with Intel, then this would be seen as a huge breach of contract. But the escalating legal action is taking a toll on Qualcomm's financial performance-a 90 percent year-over-year drop in quarterly profit, the company CEO said on Wednesday. Qualcomm reckons that Apple used this access to help Intel in its quest to compete in the LTE modem market.

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Revenue from its Qualcomm CDMA Technologies (QCT) unit, which includes its chip business that supplies both Android smartphone makers and Apple, rose 13 percent to $4.65 billion.

Apple then chose to stop making licensing payments to Qualcomm, which led to a massive drop in revenue for Qualcomm.

Apple will reportedly not use any Qualcomm components in 2018 (CNET/CBS Interactive). The sources who leaked the plan said that next year's iPhone and iPad models could already be built with components from other manufacturers, namely Intel or Taiwan-based MediaTek Inc. Still, these results are a reflection of the toll that the legal battle between Qualcomm and Apple is taking.

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