Qualcomm said it has won a ruling in China against Apple that bans the sale of some iPhone models in that country.
The Fuzhou intermediate people’s court ruled that Apple is infringing on two Qualcomm patents and issued injunctions against the sale of the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X, the San Diego, California-based chip maker said in a statement on Monday.
The ruling is part of a worldwide dispute between the two US companies over licensing fees that Qualcomm charges for use of technology that the chip maker says underpins all modern phone systems.
Apple has argued that its former supplier unfairly leverages its position as the biggest supplier of chips for smartphones to force payment of the fees. Qualcomm has countered that Apple is using its intellectual property without paying for it and the legal cases are aimed at forcing it to lower licensing charges.
Apple shares fell 2% in early trading in New York. Qualcomm rose 2.9%.
“Qualcomm’s effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world,” Apple said in a statement. “All iPhone models remain available for our customers in China.”
The patents are related to adjusting and reformatting the size and appearance of photographs and managing applications using a touch screen, Qualcomm said. They are just two of a number of patents Qualcomm is using against Apple in disputes in several countries.
China is the world’s largest market for smartphones and is home to the manufacturers of the iPhone for Apple. The device accounts for about about two-thirds of Apple’s revenue. The ruling doesn’t include the most recent iPhone models, introduced in September.
Qualcomm wants to force Apple to the negotiating table in what it says is a commercial dispute. The iPhone maker has stopped paying licensing fees, Qualcomm’s largest source of profit, and no longer uses Qualcomm chips. That’s cost Qualcomm billions in revenue and the company has reported shrinking sales since 2014.
Apple and one other unnamed company are the only major phone makers that do not pay Qualcomm licensing fees. Qualcomm charges a percentage of the selling price of each handset sold regardless of whether the device is based on its chips or not. Apple contends that Qualcomm’s fee should be based on the price of the component, not the phone, a difference of hundreds of dollars per phone.
Even amid disputes and non-payments, the fees provided Qualcomm with more than half of its profit last year. — Reported by Ian King, (c) 2018 Bloomberg LP