Could The Qualcomm Feud Result In An iPhone 8 Ban?

Could The Qualcomm Feud Result In An iPhone 8 Ban?
Image Source: ValueWalk Team

With all the hype about the tenth anniversary iPhone and the ongoing battle with Qualcomm, we knew it was only a matter of time before people start wondering about whether an iPhone 8 ban could be the result of the fight. The short answer to the question is: we highly doubt it.

The fight with Qualcomm shifted into high gear with the chip maker’s most provocative move yet. It wants to ban sales and imports of some iPhone models, which is why some are wondering now about the potential for an iPhone 8 ban.

Here’s what Qualcomm and Apple are fighting about

Qualcomm accuses Apple of using its technology without paying for it, while Apple accuses Qualcomm over patent licensing terms because it wants to pay less than what the chip maker is demanding to use its standard essential patents.

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This legal fight has been going on since January, and it originated from some essential technology that’s needed to comply with industry standards that enable phones to connect to cellular networks. Qualcomm owns patents for both 3G and 4G technology, so any company that wants to make a phone that connects to 3G or 4G networks will have to pay the company to license those patents, whether they use Qualcomm’s chips or not, according to CNET.

Earlier this year, Apple followed along with the accusations lodged by the U.S. Federal Trade Commission and overseas antitrust regulatory bodies, which were alleging that Qualcomm has a chip monopoly and unfairly uses its dominant position. It also demanded that the chip maker fork over $1 billion in rebates. Apple claims it has been trying for over five years to reach an agreement with the chip maker because it feels the fees are too high.

A new tactic

Qualcomm’s latest shot in the case against Apple is a complaint filed with the U.S. International Trade Commission, but this time, the patents it’s complaining about are not standard essential patents, the company’s general counsel told CNET. Qualcomm received all six patents between 2013 and this year, and none of them are covered by the patent agreement Apple supplier Foxconn has with the chip maker.

This complaint filed with the ITC is specifically related to six of Qualcomm’s patents, which Apple stopped paying licensing fees through its manufactures earlier this year. It’s also a direct answer to Apple’s last shot in the battle in June, which was to widen its patent lawsuit and claim that some of Qualcomm’s patents were not valid. The iPhone maker also attacked the chip maker’s business model.

The six patents Qualcomm has taken issue with deal with various performance aspects of smartphones. One is regarding battery life, while three others are about how smartphones connect to the Internet and use data. The fifth is about graphics, and the last is regarding high and low voltage circuits.

Qualcomm seeks an iPhone 8 ban

Along with its complaint, the chip maker has also asked the U.S. regulatory body to ban sales of iPhones that don’t have Qualcomm chips in them. This would include some iPhone 7 and 7 Plus models, like those running on the T-Mobile and AT&T networks, although the models that run on the Verizon network have Qualcomm chips in them, so they would be safe. Presumably, if Qualcomm wins this legal battle, there would be an iPhone 8 ban on models that don’t contain its chips. Apple is in an interesting spot because it probably wants to minimize the use of Qualcomm’s chips, but it risks an iPhone 8 ban by not using them.

Moor Insights & Strategy analyst Patrick Moorhead told CNET that he believes this complaint is the chip maker’s “best chance yet to win a favorable ruling” because of how it has “narrowly defined the ITC complaint against Apple.”

You may recall that Apple managed to score a win in its long-running legal battle with Samsung, and it even included a ban on some of the Korean company’s phones which the court ruled infringed upon its patents. However, the Samsung phones that were affected were so old when they were banned that it had no impact on the company because they weren’t widely for sale in the U.S.

Why an iPhone 8 ban is unlikely

So as you can see, this legal case is a long and drawn-out matter even though, as far as patent litigation goes, this case is still very young. Qualcomm’s general counsel knew going in that it’s unlikely they will reach a resolution soon, as he’s telling the media that they don’t expect an answer from the ITC for 18 months.

As such, even if the chip maker manages to win an iPhone 8 ban, it won’t really matter because in 18 months, consumers will be looking past the 8 to a couple more generations down the line. An iPhone 8 ban might impact sales of used phones, but 18 months from now, those who really want an iPhone 8 the most will have bought one already and maybe even the model after it.

There’s also another clue from the battle between Apple and Samsung that may give us a hint as to why an iPhone 8 ban is unlikely. Samsung initially won a ban against some Apple devices, but then-President Obama vetoed it, demonstrating that the Oval Office isn’t above protecting the company. Of course Trump is in office now, and he has on more than one occasion showed disdain for Apple, although he has now been forced to use an iPhone. However, he could easily be convinced to veto any ban affecting the iPhone, despite his previous calls for a boycott.

And there’s no denying that Apple has considerable clout in the U.S., in addition to a massive fanboy following. The company can easily bring its power to bear and even if it loses the case to Qualcomm, the worst that will probably happen to Apple is a slap on the wrist with a demand to hand over the change from underneath its couch cushions. There’s little to no chance of an iPhone 8 ban, and even if there is a ban, it won’t have any serious impact on the company. It’s too powerful for anything like this to take it out.

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