Ltd., known as Foxconn: Pegatron Corp.; Wistron Corp.; and Compal Electronics - all based in Taiwan but with manufacturing operations in China and elsewhere.
Early this year, it withheld $1 billion in reimbursements on the grounds that Qualcomm had reneged on a separate royalty "rebate" agreement with Apple in retaliation for Apple's cooperation with anti-trust regulators. The FTC is investigating Qualcomm's alleged antitrust practices, while Apple went ahead and sued the company for overcharging for critical chips used in the iPhone.
Qualcomm supplies the LTE modem in Apple's smartphone, stated the report. And, that these manufacturers are paying Qualcomm licensing fees for non-Apple products, but not those for the Cupertino-branded devices.
"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", the company said.
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Qualcomm is suing Chinese iPhone and iPad contract makers it says have stopped paying it royalties at the behest of Apple.
Qualcomm Inc. sued the manufacturers that make iPhones for Apple Inc. for failing to pay royalties on the chip maker's technology, widening its legal battle with the world's most valuable company. "Qualcomm's demands are unreasonable and they have been charging higher rates based on our innovation, not their own". "Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined". With the contractors in turn not paying Qualcomm - at Apple's direction, Qualcomm says - the chipmaker last month was forced to slash third-quarter forecasts because it's unclear when the royalties will be paid.
Um offers that the manufacturers could "file suits against Apple for payment", but risk losing business with Apple. "Moreover, Apple has agreed to indemnify defendants for any damages they may incur as a result of breaching their agreements with Qualcomm, further demonstrating Apple's strong-arm tactics". "And we said, that is interesting, but that is between you and Apple". To deny the case would continue to impede the progression of the technology and drive up the cost of smartphones for consumers, it argued.
Qualcomm responded Friday saying the FTC's argument "does nothing to cure the fundamental flaws in its complaint against Qualcomm: no coherent theory of competitive harm and no allegations of the type of conduct that the antitrust laws are created to address".