Qualcomm Is Trying To Get China To Ban Sales Of iPhone XS, XR

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It's no secret that Qualcomm (NASDAQ:QCOM) and Apple (NASDAQ:AAPL) have a relationship that is in the toilet, so to speak. Things really began to take a turn for the worst when in 2017, Apple filed suit against Qualcomm for charging more for their modems sold to Apple compared to other smartphone manufacturers.

Qualcomm was said to have withheld over $1 billion in rebates owed to them over the fact that Apple gave information to legal authorities, which may have led to an $857 million USD fine levied against Qualcomm in South Korea.

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Qualcomm has retaliated by beginning to campaign globally to halt sales of iPhones over apparent violations of some patents it holds that Apple hasn't gained a license to use.

Most lawyers have remained doubtful that the patent-violations would amount to any real regulatory body action, as Qualcomm's efforts in the U.S. have largely gone nowhere.

However, this Monday a Chinese court ruled to block the sale of some older iPhone models. Now Qualcomm is going after the much more important iPhone XS, and XR product lines. Jiang Hongyi is a lawyer at Lexfield Law Offices who represents Qualcomm in the patent suits in China.

“We plan to use the same patents to file suit against the three new iPhone models,' he said Thursday speaking to the FT.

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We'll have to see where this one goes but the implications for Apple are huge. Roughly 20 percent of its sales come from China, Hong Kong, and Taiwan, good for about $52 billion revenue of its most recent fiscal year.

China has been slighted lately as Huawei, one of its most successful telecom handset makers, has been dragged over the coals in the U.S. Carriers have dropped handsets and American government bodies have publicly accused the company of attempting to spy on behalf of the Chinese. As a result, Huawei and its range of excellent devices have gained almost zero market traction in the U.S. No major U.S. telecoms currently offer any phones made by the company.

China may not even care if Qualcomm has a legal leg to stand on, yet could go ahead and ban sales of iPhone regardless to hurt America's most valuable company.