Apple has told Qualcomm it will not pay license fees until the licensing dispute between the two companies is resolved. Apple sued the company in January and asked for USD 1 billion back in fees, saying it overpaid for using Qualcomm’s technology due to the chipmaker abusing dominant market position. Qualcomm filed a counter claim in April, denied the claims and said that Apple had breached and mischaracterized agreements and negotiations.
But as a result of the payments being withheld, Qualcomm said it must downgrade its guidance for the third quarter to exclude the royalty revenues. It therefore now expects revenues of USD 4.8-5.6 billion, from its previous guidance of USD 5.3-6.1 billion and the result recorded the year earlier of 6.0 billion. Earnings per share are now seen at USD 0.52-0.62 from the previous guidance of 0.67-0.92 and the 0.97 reported the year before. Diluted EPS is now forecast at USD 0.75-0.85 from the guidance given before of 0.90-1.15 and the 1.16 posted in 2016.
Qualcomm said the Apple was “improperly interfering” with long-standing agreements and that the licenses remain valid and enforceable. Apple has acknowledged that payment is owed for the use of Qualcomm’s intellectual property but insists contract terms be changed.
