Qualcomm Inc. – one of the largest chipmaker in India – is seeking to ban the manufacture and sale of the Apple smartphones in China. China is the one of the most important countries for the Cupertino-based smartphone maker, hence, if Qualcomm is able to actually ban the iPhones from China, the tech giant would be in a big disadvantage.

Here’s what the lawsuit is about

The chipmaker filed lawsuits in China in order to ban the sale of iPhones and inflict pain on the tech company in the largest market for smartphones worldwide. The San Diego-based company aims to cut off production in a place where most of the iPhones are manufactured. In addition to this, it cannot be ignored that the iPhone provides almost two-thirds of the revenue of Apple. Christine Trimble, a company spokeswoman said that the chip making company filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief.

Trimble said, “Apple employs technologies invented by Qualcomm without paying for them.” Initially, the shares of the tech giant gave up some gains from earlier on Friday before recovering whereas the stock of the San Diego-based chip maker maintained small losses.

The company said that its lawsuits filed by the chipmaker are based on three non-standard essential patents. The chipmaker said that the lawsuits cover a touch-screen and power management called Force Touch that the Cupertino-based iPhone maker is using in current iPhones. Trimble said that the inventions are a few examples of the many Qualcomm technologies that the tech giant is currently using to increase its profits and improve its devices.

What does Apple has to say about these lawsuits?

Josh Rosenstock, an Apple spokesman said, “In our many years of ongoing negotiations with Qualcomm, these patents have never been discussed.” The tech company says that the claim has no merit. Rosenstock added, “Like their other courtroom maneuvers, we believe this latest legal effort will fail.” The lawsuit was filed by the chipmaker at the Beijing court on Sept. 29. The Beijing court has not made the claims public yet.

Mike Walkley, an analyst at Canaccord Genuity Inc., said that this was just another step (of Qualcomm) to get the tech company back to the negotiating table. Walkley said, “It shows how far apart they are.” He said that there is no precedent or very little precedent for a Chinese court taking such action at the request of a U.S. company. Further, the China-based regulators would be concerned that a halt of manufacture of iPhone would cause layoffs at suppliers of the tech giant, including major employers like Hon Hai Precision Industry Co.

 

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