Last year, Apple Inc. and chipmaking giant Qualcomm locked horns over the dispute involving the use of Qualcomm’s patents. Since then, the chipmakers has filed several legal cases seeking an import ban on the iPhone. On Tuesday, March 26, Judge Mary Joan McNamara at the International Trade Commission put forward a recommendation to put a ban on China-made imported iPhones.
This had an immediate effect on the movement of the Apple stock in the afternoon trading session, leaving investors jittery. At the press time, the AAPL stock is trading at $186.79, 1% down on the Tuesday closing.
According to Judge McNamara, Apple has reportedly infringed on Qualcomm’s patents. However, the recommendations of the judge require approval from the commission before final materialization.
The official statement issued by Judge McNamara reads:
“I have found that Complainant, Qualcomm Incorporated (“Qualcomm”), has proven by a preponderance of evidence that Respondent, Apple, Inc. (“Apple”), has violated subsection (b) of Section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain mobile electronic devices containing processing components.”
Qualcomm General Counsel Don Rosenberg thanked Judge McNamara on the decision. Rosenberg said: “We appreciate Judge McNamara’s recognition of Apple’s infringement of our hardware patent and that she will be recommending an import ban and cease and desist order”.
The major shocker came just a day after Apple announced its new services and products on Monday, March 12. The Cupertino-based tech giant announced Apple News, Apple Arcade, and its much-awaited video-streaming service Apple TV+. Moreover, the tech giant also plans to up the game in the financial space by launching the Apple Card.
ITC Invalidates Qualcomm Patent in Another Ruling
In a surprising turn of event, the U.S. ITC invalidated Qualcomm’s patent claims for battery saving feature, in another ruling. In the patent, Qualcomm argues that Apple has billions of dollars in unpaid royalty to the chipmaker. However, Apple denies any sort of infringement to the patent and accuses Qualcomm of trying to shut down its only U.S.-based competitor.
Apple also thanked the International Trade Commission for invalidating the Qualcomm patent. In a statement, Apple said:
“We’re pleased the ITC has found Qualcomm’s latest patent claims invalid, it’s another important step to making sure American companies are able to compete fairly in the marketplace. Qualcomm is using these cases to distract from having to answer for the real issues, their monopolistic business practices.”
The iPhone maker also argues that Qualcomm’s claims could hinder the development of the fifth-generation of mobile communications. On the other hand, Qualcomm argues that not enforcing its patents will lessen the value of its innovation and give other players like ‘Huawei Technologies’ a lead in the market share. The ITC has scheduled a final decision on this matter in July 2019.
Apple’s New Services Sets the Tone for Its Stock Growth
While Apple saw a momentary dip in its share price on Tuesday, it remained largely neutral in its movement. The announcement of new services is Apple’s strategy to reduce its dependence on iPhones, after having witnessed poor sales in the last few quarters.
“Though all of these services are interesting from a platform churn point of view none seem likely on our calculations to materially impact earnings per share in the short term. With small calculated impacts from these. ‘Other services,’ we expect the focus to return to the slowing iPhone business post this event.
Apple’s Services reveal was materially different than we had anticipated. We were surprised that Apple announced the launch of a video service this Fall rather than sooner with no pricing information provided at the event.”