Why do you have to worry about the last chapter in Apple v Qualcomm

The legal confrontation between Apple and Qualcomm is not new. The two giants of technology have been firing for years in the courts of three continents. But Monday marked the start of the main trial in what is essentially the largest patent / antitrust case in the world – and, according to the winner, the implications are enormous for technology.

The basics are as follows. Two years ago, Apple sued Qualcomm for more than $ 1 billion in unpaid royalties, claiming that Qualcomm had been engaged in unfair patent licensing practices. As for Qualcomm, it stands out because it was one of the pioneers of CDMA – a type of wireless communication network – in the 1990s and has since proven itself by charging royalties of its 130,000 patents. With regard to smartphones, Qualcomm charges around 5% of the price of a handset thanks to its various wireless patents. This means that even if a smartphone does not use a Qualcomm modem, smartphone manufacturers like Apple still have to pay these fees. And if a manufacturer uses a Qualcomm chip, he must not only pay for the chip, but also the royalties that accompany it.

Qualcomm, of course, considers Apple's claims as a mess. The chip maker also filed a lawsuit against Apple, claiming that it also owed royalties in the amount of $ 7 billion. The company also asked regulators to ban the import of some iPhone models, mostly older phones using Intel chips. He was not granted the ban as a judge ruled that he would give Qualcomm an unfair advantage in the United States, but partial bans were put in place in Germany and China. Qualcomm also had to deal with a hostile Broadcom public offer that required the intervention of the Trump administration.

Still confused? It's good. What is important for the industry and consumers as a whole is more important than understanding the legal consequences. These tit-to-tat battles are just the first bursts of the main trial that started this week in San Diego – and the stakes are incredibly high.

Apple's complaint has been merged with four of its suppliers and collectively the companies could claim up to $ 27 billion under antitrust laws. If Apple wins, not only does it recover a lot of money, but it loses some freedom from Qualcomm in terms of used components and chip makers. The same goes for other smartphone manufacturers, such as Samsung, which currently produces many of its own chips. In the meantime, the lawsuit is a question of existential survival for Qualcomm. Not only lose the full income model of the chip maker, but also, according to The Financial TimesPotential damage could be more than four times Qualcomm's total net profit of $ 5.7 billion in 2016. It could also have a knock-on effect on 5G technologies, which Qualcomm is positioning as a major leader. Despite everything, Qualcomm does not let down and is also looking to get up to $ 15 billion from Apple.

As if to underline the seriousness of the lawsuit, Tim Cook and Steven Mollenkopf, CEO of Qualcomm, and Irwin Jacobs, co-founder of Qualcomm, should all speak up.

Earlier this year, the Federal Trade Commission (Federal Trade Commission) brought Qualcomm to court to argue that it was an abusive monopoly. The "chip maker" policy of "no license, no chips" has been described as powerful armament manufacturers, as well as competing chip makers like Intel. The FTC also claimed that smartphones would not be as expensive without Qualcomm's patent license. (Of course, Qualcomm says its fees are negligible in terms of smartphone pricing.)

Regarding the 5G, the problems between Apple and Qualcomm are that it is unlikely that the first can get hold of Qualcomm 5G modems. This means that Apple has to trust Intel (or Huawei – unlikely – or find a way to make its own chips), but it seems more and more unlikely that Intel has a chip ready by 2020.

Only time will tell how the trial will proceed, but regardless of the winner, the effect of training will certainly not go unnoticed.

[Reuters]