[Qualcomm and Apple's lawsuits costed $125 million in Qualcomm in the first quarter alone and future costs will increase further] According to foreign media reports, Qualcomm is responding to a series of lawsuits filed with Apple and US regulators. In order to litigate, the chip giant spent only 125 million U.S. dollars in the first quarter of this year. It also warned that the related costs will increase further in the future.
The focus of Apple’s and Qualcomm’s legal battles was mainly on patent royalties, which have caused the latter's profits to fall sharply. According to the latest earnings report released on Wednesday, Qualcomm’s net profit fell 52% year-over-year to US$363 million in the first quarter. The main reason was that since the dispute broke out more than a year ago, Apple and its OEMs stopped Qualcomm pays royalties. In the quarter ended in March, Qualcomm’s revenue was US$5.3 billion, an increase of only 5% year-on-year.
According to Qualcomm’s chief financial officer George Davis, he told investors on the conference call that due to Apple’s lawsuit and the US Federal Trade Commission’s relevant anti-monopoly investigation, the company’s expenditure this year will “significantly increaseâ€.
"For the second quarter (first season), we spent about $125 million on these cases and we expect the related costs to increase further in the third quarter," he said.
In June this year, the International Trade Commission will hold the first hearing on Qualcomm’s patent infringement charges against Apple. In this case, Qualcomm tried to ban the import of some iPhone models. At the same time, similar intellectual property cases are expected to be heard in Germany. Qualcomm and Apple also quarreled over patents in various jurisdictions in China.
On the other hand, Apple's case against Qualcomm is expected to be tried before the end of this year.
It is not only Apple that brings legal costs to Qualcomm. It is also trying to convince Chinese regulators to approve its $44 billion acquisition of chip maker NXP's deal.
Last week, Qualcomm was forced to withdraw and resubmit its application in order to obtain approval from the Chinese anti-monopoly authority. Earlier, the Chinese Ministry of Commerce warned that the deal "may have a negative impact on market competition."
However, Steve Mollenkopf, CEO of Qualcomm, believes that the growing Sino-U.S. trade conflict is the reason for delays in approval.
“While we continue to work closely with Chinese regulators and remain optimistic about obtaining the necessary regulatory approvals, it is clear that geopolitical environment and trade activities are having an impact on the approval process,†he said.
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