Qualcomm warned the US investor watchdog that revenue from its iPhone modem sales may continue to decline, with the company promising further disclosure on its dealings with Apple in its next quarterly trading update.
In a document sent to the US Securities and Exchange Commission (SEC), which was seen by Reuters, the chip maker reiterated its iPhone hardware revenue was partly dependent on the share of handsets Apple used its modem in, rather than technology from rival companies.
Some versions of the iPhone 7 were shipped with Intel chips rather than Qualcomm ones – a departure from earlier models where Qualcomm was the sole supplier.
The company is scheduled to issue its next quarterly results filing – covering its fiscal Q4 – on 1 November.
Legal spat
The SEC requested clarification of Qualcomm’s dealings with the device manufacturer at a time when the companies are locked in a fierce legal battle regarding licensing terms and patents.
In the latest twist, the US International Trade Commission agreed to investigate whether iPhones using cellular baseband processors not supplied by Qualcomm affiliates broke IP regulations.
The chip maker is seeking a ban on import and sale of what it believes are handsets containing technology which infringes its patents. Meanwhile, Apple accused Qualcomm of charging royalties on technologies it has nothing to do with.
As a result of the ongoing dispute, Apple manufacturers are holding back royalty payments to Qualcomm.
In its fiscal Q3 earnings update, Qualcomm said the action had contributed to a decline of 40 per cent in profit for the three months to 25 June. At the associated analyst call, Qualcomm CEO Steve Mollenkopf told investors the dispute would also hit its fiscal Q4 figures.
