Shares of chip company Qualcomm fell about 7 percent on Tuesday morning, after reports signaled more trouble between Qualcomm and Apple.
The Wall Street Journal reported overnight that Apple was designing products for next year that would not include Qualcomm components, relying instead on chips from Intel and potentially MediaTek. Two unnamed sources also told Reuters that Apple’s designs for fall 2018 could exclude Qualcomm components.
Intel shares rose nearly 2 percent in Tuesday morning trading.
Qualcomm invested heavily in mobile technology ahead of rivals like Intel, and as a result, Qualcomm semiconductors power many major high-end smartphones. Still, it’s not unusual for companies to seek multiple suppliers.
But Qualcomm and Apple are also in the middle of a legal spat over the way Qualcomm distributes its technology.
Apple sued Qualcomm for roughly $1 billion earlier this year, saying Qualcomm has been “charging royalties for technologies they have nothing to do with.” Apple alleges that Qualcomm charges Apple “at least five times more in payments than all the other cellular patent licensors …. combined,” and that Qualcomm has withheld payments from Apple.
Qualcomm has dismissed Apple’s claims as groundless. Qualcomm, in turn, has asked international regulators to ban imports of some iPhones until Apple resumes paying for use of the patents.
Qualcomm declined to comment on the speculation about whether Apple is considering not including Qualcomm in the next-generation iPhones.
But when asked whether Qualcomm is giving Apple access to software to test the modem in iPhones, a spokeswoman said: “The Qualcomm modem that could be used in the next generation iPhone has already been fully tested and released to Apple. We are committed to supporting Apple’s new devices.”
Apple did not immediately respond to a request for comment.
Source: Investment Cnbc
Qualcomm tumbles nearly 7% amid reports that Apple might drop its chips