Chipmaker Qualcomm Inc yesterday said it would not cut licensing fees as a way to end legal disputes with Apple Inc, showing its strong stance over the escalating legal war with the world’s most profitable technology company.
“That is not our strategy,” Donald Rosenberg, Qualcomm’s general counsel and corporate secretary, told a media briefing at the company’s headquarters in San Diego, California.
“We have a royalty rate system that has been consistent with industry practice for almost three decades,” Rosenberg said.
Qualcomm has been embroiled in the sprawling legal spat with Apple since January, when Apple filed a lawsuit accusing Qualcomm of abusing its market power to charge unfair royalty fees.
Qualcomm rejected the accusation, saying it has kept the same licensing model and rates since it entered the business in 1996.
Qualcomm has accumulated more than 345 licensees for its wireless technologies, with about 10 billion devices powered by those licensed technologies, it said.
“There is no justification for the kind of action that Apple has taken... We will win,” Rosenberg said. “Personally, I never like a bully.”
Prior to joining Qualcomm, Rosenberg served as senior vice president, general counsel and corporate secretary at Cupertino, California-based Apple.
Since early this year, Apple has refused to pay licensing fees to Qualcomm, and has asked its Taiwanese contract manufacturers — including Foxconn Technology Group (富士康), Pegatron Corp (和碩), Wistron Corp (緯創) and Compal Electronics Inc (仁寶) — to follow suit, Qualcomm said.
Apple does not have a direct license with Qualcomm and has paid the fees through its suppliers.
However, those contract manufacturers have continued to pay licensing fees to Qualcomm for the use of its technology in manufacturing devices for companies other than Apple, Rosenberg said.
Asked whether Samsung Electronics Co was the second technology company that followed Apple in requesting lower licensing fees, Rosenberg declined to provide further information.
However, he said Samsung was among a few instigators behind the Korea Fair Trade Commission’s investigation of Qualcomm’s business practices last year. The South Korean antitrust regulator later fined Qualcomm 1.03 trillion won (US$902.4 million) for what it called unfair business practices in patent licensing and modem chip sales.
Samsung is a powerful company in South Korea, as its production value accounts for 20 percent to 25 percent of the country’s GDP, Rosenberg said.
Asked whether Qualcomm would consider adjusting its licensing fees as smartphone and tablet makers face shrinking profit margins due to decelerating shipment growth, Rosenberg said he could not agree.
“There are still many places where the [wireless] technology has not fully blossomed, unlike in Taiwan, the US and other places. I think there are still enormous opportunities,” he said.
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