Derek Aberle, Qualcomm's president, told analysts that Apple induced the ODMs to underpay royalties owed to Qualcomm for sales during the calendar fourth quarter of 2016. Apple withheld part of its payments to these suppliers of close to $1 billion, an amount equal to what Apple claims that Qualcomm owes Apple in rebate payments under a separate cooperation agreement between the two companies, Aberle said.
Most of these suppliers have already reported royalties owed to Qualcomm in their financials and Qualcomm expects that they will ultimately make the payments, Aberle said. All have contracts with Qualcomm, many of which date back to before Apple sold the first iPhone, Aberle added.
"Despite Apple's claims against Qualcomm, Apple suppliers remain contractually obligated to pay royalties to Qualcomm under their license agreements with us, including for sales of iPhones to Apple," Aberle said.
Apple filed suit against Qualcomm in U.S. District Court in January, claiming, among other things, that "after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.” Qualcomm countersued last week, saying Apple refused to pay royalties, pressured contract manufacturers not to pay them, instigated regulatory investigations and throttled performance of an LTE modem chip.
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