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Abu Dhabi, UAEWednesday 27 March 2019

Apple forced to use Qualcomm chips as court battle looms between two

iPhone maker will restart selling older models in Germany but says has 'no choice' but to use chips from opponent in global legal fight

Qualcomm campus in California. Apple is using its chips despite legal fall out. Reuters
Qualcomm campus in California. Apple is using its chips despite legal fall out. Reuters

Apple said on Thursday that it will resume selling older iPhone models in its stores in Germany after they were banned last year, but only with chips from Qualcomm, which is in a global legal battle against the US tech giant.

Apple said it had "no choice" but to stop using some chips from Intel in iPhones headed to Germany in order to comply with a patent infringement lawsuit Qualcomm won against Apple there in December.

Qualcomm, the world's biggest supplier of mobile chips, sued Apple in Germany alleging that some older iPhone 7 and iPhone 8 models violated Qualcomm patents around so-called envelope tracking, a feature that helps mobile phones save battery power while sending and receiving wireless signals. The alleged patent violation stemmed not from Intel chips but yet another Apple supplier - Qorvo - whose chip was only present in older phones with Intel modems.

The court sided with Qualcomm and banned sales of some iPhone models that used Intel modem chips, leading Apple to pull the devices from its 15 retail stores in Germany and its online store in the country.

The ban was a victory in Qualcomm's legal conflict with Apple.

The iPhone maker has alleged that Qualcomm engaged in illegal patent licensing practices to protect a monopoly on so-called modem chips, which connect mobile phones to wireless data networks, Reuters said. Qualcomm has in turn alleged that Apple has infringed its patents. A major case between the two goes to trial in the United States in April.

Apple began phasing in Intel's modem chips in 2016 after years of using chips exclusively from Qualcomm. In last year's iPhone models, Apple dropped Qualcomm's chips completely in favour of Intel's. But Qualcomm has continued to supply Apple with chips for older models, and Apple on Thursday said it would use only those for German iPhone 7 and 8 models.

"Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands," Apple said.

Newer iPhones with Intel chips remain on sale in Germany.

"Intel's modem products are not involved in this lawsuit and are not subject to this or any other injunction," said Steven Rodgers, Intel's general counsel.

The latest setback for Apple comes after it last month cut its revenue outlook for the latest quarter, citing steeper-than-expected "economic deceleration" in China and emerging markets.

The rare revenue warnings from Apple suggested weaker-than-anticipated sales of iPhones and other gadgetry, in part because of trade frictions between Washington and Beijing, according to AFP. The company slashed its revenue guidance for the first fiscal quarter of 2019, ended December 29, to $84 billion - sharply lower than analyst forecasts averaging $91 billion.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China," Apple chief executive Tim Cook said in a letter to investors.

"We believe the economic environment in China has been further impacted by rising trade tensions with the United States."

Apple is the target of nationalist sentiment over the arrest of Huawei's chief financial officer in Canada at the behest of the United States on alleged Iran sanctions violations.

Updated: February 14, 2019 04:31 PM

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