Apple Inc. Confirms It’s Stopping Payments to Qualcomm Amid Lawsuit

The legal battle between Apple Inc. (NASDAQ:AAPL) and QUALCOMM, Inc. (NASDAQ:QCOM) continues to heat up, with Apple officially confirming it will no longer pay royalties to the chipmaker until their lawsuit is settled.

MacRumors has some notes on the ongoing legal battle:

The legal dispute between the two companies follows a complaint filed by the Federal Trade Commission, stating that Qualcomm used anticompetitive tactics to remain on top of the LTE modem supply chain for smartphones. Another contributing factor to the bad blood between the companies centers around Apple’s decision to start using modem chips from Intel in some of the iPhone 7 devices launched last year, instead of tapping Qualcomm exclusively like it usually does.

In a statement to Axiom, Apple indeed confirmed that it’s suspended payments to QCOM:

“We’ve been trying to reach a licensing agreement with Qualcomm for more than five years but they have refused to negotiate fair terms,” Apple told Axios in a statement. “Without an agreed-upon rate to determine how much is owed, we have suspended payments until the correct amount can be determined by the court. As we’ve said before, Qualcomm’s demands are unreasonable and they have been charging higher rates based on our innovation, not their own.”

A win in the case would likely open the door for other mobile device makers to take similar actions against Qualcomm, whose stock has taken a major hit already as a result of the legal issues.

Apple Inc. shares closed at $143.65 on Friday, down $0.14 (-0.10%). Year-to-date, AAPL has gained 24.57%, versus a 6.97% rise in the benchmark S&P 500 index during the same period.

AAPL currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 27 stocks in the Technology – Hardware category.

Meanwhile, QUALCOMM, Inc. shares closed at $53.74 on Friday, up $0.53 (+1.00%). Year-to-date, QCOM has declined -16.81%.

QCOM currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #69 of 93 stocks in the Semiconductor & Wireless Chip category.

Source: stocknews.com stocknews.com

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