Qualcomm reveled during its earnings call today that it expects $4.5B to $4.7B revenue from the unexpected settlement with Apple. Qualcomm says that it is continuing to assess the impacts of the deal on the company. The estimates are expected to go up, as this figure is calculated just based on the direct revenue and associated liabilities.
Meaning, Qualcomm isn’t obligated to refund Apple or its suppliers.
Qualcomm's industry practices
The figure also doesn’t represent the royalties Apple has to pay. Qualcomm is well known for double charging their clients – licensing and direct payments. There have been much controversial talks about Qualcomm’s industry practices.
Apple attorney Ruffel Cordell compared Qualcomm’s practices to a KFC (Kentucky Friend Chicken) restaurant that won’t sell a bucket of chicken to its clients.
“You first have to go over to this different counter, KFL – Kentucky Fried Licensing,” Cordell said to the jury. “You have to go pay that ‘eating license’ fee before they’ll sell you any chicken.”
Qualcomm justified saying that its portfolio of over 130,000 patents include technology in all chips, and they have to protect the technology regardless of the chipset that a company purchases from them.
Apple's Q2 earnings
Apple reported its Q2 results recently, but didn’t comment on any of the financial impacts caused by the Qualcomm settlement, in typical Apple fashion. iPhone shipments are also low compared this quarter compared to last year.
The estimated pay-off from Apple to Qualcomm is put around $6B.
