Oct 30, 2020 | Updated: 09:48 PM EDT

Qualcomm Slashes Revenue Forecasts As Apple Stops Paying Royalty Fees

May 01, 2017 08:15 AM EDT

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Qualcomm has cut its profit forecasts as the company revealed that Apple has ceased payments to Qualcomm pending the lawsuit outcome between the technological giants. As it might seem, Apple suppliers are already withholding payments to Qualcomm and this has been viewed as a "global attack" by Apple.

According to Don Rosenberg, Apple has acknowledged the royalty payments to Qualcomm for using its intellectual property. However, after this Apple has started interfering with the contract terms of the royalty payments. In fact, the same contract terms bind Apple products like the iPhone and cellular-enabled iPad. 

Due to the retraction of revenue forecasts, Qualcomm stock prices have fallen, reports Reuters. Qualcomm is expecting a quarter year revenue scale amounting to $4.8 billion-$5.6 billion, which is down from the $5.3 billion-$6.1 billion as previously expected. As of now, shares of Qualcomm amount to $50.91 at market trading, down by 4.3 percent.

According to 9To5Mac, Apple had previously sued Qualcomm, claiming that the company was charging royalty fees for technology and patents it did not own or had any inferred intellectual property rights to. Apple also quoted that Qualcomm was over-charging for the technology that the company had.

Apple commented that Qualcomm would charge for innovating technologies that had nothing to do with them. Features like Touch ID and cameras that came to the iPhone 7 and the MacBooks of 2017 would be charged by Qualcomm for no particular reason and this created innovation costlier for Apple.

Apple has already elevated the lawsuit against the company in Chinese as well as markets of UK. If Qualcomm loses the case, the impact would be great enough, but not enough to stall Qualcomm's revenues.Qualcomm is one of the companies that does not depend on Apple for technology or engineering.

 Meanwhile, Qualcomm recently showcased the SnapDragon 835 Soc. The processor is said to hit all flagship phones by Q3 2017. For now, only the Galaxy S8 has come with the SnapDragon 835.

 

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