General
January 19, 2019
6 minutes read

Leaked E-mails Show Apple And Qualcomm May Have Fallen Out For Another Reason

image : Apple Apple and Qualcomm are in the midst of a legal battle regarding licensing and royalty payments for…

image : Apple

Apple and Qualcomm are in the midst of a legal battle regarding licensing and royalty payments for use of the latter’s chips, a business method Apple is pushing against which has led to a fallout between both companies. The ongoing suit has seen Apple COO Jeff Williams testify that Qualcomm refused to supply chips for 2018 iPhones and Qualcomm CEO Steve Mollenkopf argue that its push to become the sole supplier of iPhone chips, one that regulators term as anti-competitive conduct was in response to a $1 billion “incentive payment” demanded by Apple.

But leaked e-mails between Williams and Mollenkopf seen by Bloomberg suggests that both companies may have cut ties over a software dispute. “In my wildest imagination of some evil intention of Apple, I have trouble coming up with a real scenario where anything of significant value could be leaked based on this code,” Williams penned in September 2017.

Qualcomm CEO Steve Mollenkopf

Photograph by Stefen Chow/Fortune Global Forum

“I just hope the licensing dispute doesn’t cloud good judgment in the team on a massive business opportunity,” he said, noting that the iPhone maker planned to purchase about $2 billion worth of chips from Qualcomm for 2018. “I was hoping to keep some decent quantity of business flowing with hopes that the licensing stuff will get solved.”

Mollenkopf replied his main concern regarded protection of Qualcomm’s proprietary information and that he had not seen much action by Apple in response to earlier complaints on that issue. “This is independent of our license dispute. ” He wrote.

A customer compares the coral to the yellow iPhone XR

image : Apple

Although it offers a small window into the dispute between Qualcomm and Apple, this message suggests an argument regarding software, rather than licensing as the focus of their legal battle. Still, the Federal Trade Commission confronted Qualcomm CTO James Thompson in court on Friday with a 2014 e-mail exchange between him and Mollenkopf in which he suggests “striking back at Apple while we’re strong” in the midst of licensing negotiations.

According to the e-mail cited by the FTC, Thompson viewed Apple as prone to losing big business in China and North America, at the time, if it went ahead on a push-back against Qualcomm’s licensing policy. The case between both companies continues in court next week.