Source: http://ift.tt/RcBXI1 --- Monday, May 01, 2017
Reply to this post Apple’s intransigence plays into Qualcomm’s hands. Qualcomm has been forced to adjust its guidance for the coming quarter after being informed by Apple that it would not be receiving any royalties for the foreseeable future. According to Qualcomm (as Apple has made no statement), Apple has ceased payment as it finds the contract terms unacceptable even though it does acknowledge that some payment is warranted. Qualcomm’s new FQ3 16 guidance is for revenues / EPS that will be $500m – $800m (midpoint $650m) and $0.15 – $0.30 lower than the guidance given at the recent FQ2 16 results. Although the issues that Apple has with Qualcomm’s business model are very similar, if not the same as the issues that Nokia had back in 2006, the circumstances are completely different. These are: First Contract validity: The dispute that arose between Nokia and Qualcomm in 2006 occurred because Nokia’s contract had come to an end and the companies were unable to reach agreement on terms for the renewal. Nokia stopped paying Qualcomm as it had no idea how much to pay and instead accrued an estimate of the cost in its balance sheet. The contracts upon which Apple has ceased payments have not expired and I can’t see any real contractual grounds upon which to cease making payments. As a result, I do not think that it will not be difficult to show to a court that Apple is acting in bad faith and to win an enforcement order. S ...
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