Qualcomm sues four Apple contract manufacturers

PanARMENIAN.Net - Qualcomm Inc filed a complaint against Foxconn Technology Group and three other Apple Inc (AAPL.O) contract manufacturers for not paying royalties, firing the latest salvo in its fight with the iPhone maker, Reuters reports.

The other manufacturers listed by Qualcomm were Pegatron Corp (4938.TW), Wistron Corp (3231.TW) and Compal Electronics Inc (2324.TW).

Apple sued Qualcomm in January, accusing it of overcharging for chips and refusing to pay some $1 billion in promised rebates.

Qualcomm said in the complaint that Apple is trying to force the company to agree to a "unreasonable demand for a below-market direct license".

Apple could not immediately be reached for a comment.

Qualcomm said last month that Apple had decided to withhold royalty payments to its contract manufacturers that are owed to the chipmaker, for sales made in the first quarter of 2017, until the dispute is resolved in court.

"While not disputing their contractual obligations to pay for the use of Qualcomm's inventions, the manufacturers say they must follow Apple's instructions not to pay," Qualcomm said in a statement on Wednesday.

Apple has agreed to indemnify the manufacturers for any damages resulting from breaching their agreements with Qualcomm, the chipmaker said in the complaint filed in the United States District Court for the Southern District of California.

Qualcomm, the largest maker of chips used in smartphones, is a major supplier to Apple and Samsung Electronics Co Ltd (005930.KS) for modem chips that connect phones to wireless networks.

Foxconn Technology Group is the trading name of Taiwan's Hon Hai Precision Industry Co (2317.TW), the main assembler of Apple devices.

Qualcomm's shares were marginally lower at $55.66 in premarket trading.