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Apple admits Qualcomm was sole supplier for 4G modem because no other vendor matched specifications

Apple has accused Qualcomm of using its technology dominance to set high patent royalty fees.

  • Published: January 23, 2019 11:18 AM IST
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Apple has indirectly admitted that Qualcomm was the sole supplier for 4G cellular modems since it did not have any other supplier matching its requirement. In the ongoing Qualcomm vs FTC trial, Matthias Sauer, Apple’s director of cellular systems architecture, has testified that the iPhone maker looked for 4G cellular modems from a number of different companies besides Qualcomm but none of them were able to provide market-ready 4G cellular modems in time. The message from Sauer on the stands of the trial will serve as a huge boost for the company in the case where it has been accused of using its dominant position to charge higher patent royalty.

The FTC has accused Qualcomm of using its market monopoly to force phone manufacturers into paying fixed, inflated prices on chip licensing royalties. A new report from Bloomberg, which details how Sauer testified, could help Qualcomm to send a message that it does not use its market dominance and instead has a product that is ahead of the competition. Sauer testified that Apple considered the likes of Ericsson, Broadcom ad Intel Corp. as possible supplier as early as 2012 but none could deliver until Apple launched the iPhone 7 in September of 2016.

The testimony comes after Apple COO Jeff Williams and Qualcomm CEO Steven Mollenkopf testified about their business practice. In his testimony, Williams said that Apple sought to use Qualcomm chips on newer iPhone models like the iPhone XS, iPhone XS Max and iPhone XR but the chipmaker refused to do business with the company because of the patent lawsuit. Qualcomm continues to supply modem chips for older iPhone models including iPhone 8, iPhone 8 Plus and iPhone X. Days later, Qualcomm had its first chance to present its own case in the trial against the Federal Trade Commission where the chipmaker said that smartphones we have today would not be possible without its technology.

Qualcomm argues that FTC’s lawsuit is based on a “flawed legal theory” and adds the customers choose its chips because they are the best. It also told US District Judge Lucy Koh that the company has never stopped providing processors to customers, even when they are battling over licenses. Sauer also said that Apple’s decision to skip Intel as a chip supplier for the 2014 iPad was a business decision and not a technical one.

Watch: Apple iPhone XS, iPhone XS Max Hands-On

The non-jury trial will continue for three more sessions and Judge Koh will hear closing arguments on February 1, 2019. The company will try to undermine testimony by executives who supported the FTC’s case arguing the Qualcomm used its power to bully companies into using its chipsets. Qualcomm recently won injunction on sale on iPhone modes in Germany and the verdict of this trial will set a precedent for the smartphone industry and will determine whether Apple will have 5G ready iPhone this year.

  • Published Date: January 23, 2019 11:18 AM IST