Its current contract is set to expire pretty soon, and LG Electronics is looking to negotiate a new contract with Qualcomm. But Qualcomm wants to appeal the antitrust ruling – the one that basically said Qualcomm was a monopoly. By doing this, LG would be forced into an unfair agreement with Qualcomm.
LG Electronics has a court filing in the US, which opposes Qualcomm’s decision to set aside the antitrust ruling against the company. The filing reads “if Qualcomm does not participate in negotiations with LG Electronics in accordance with the court’s order, LGE will have no option but to conclude license and chipset supply agreements once again on Qualcomm’s terms.”
Qualcomm has been overcharging its partners for years, and no one really batted an eye until Apple decided not to pay Qualcomm – even though it was under contract to do just that. You see, Qualcomm charges its partners a fee for each chipset it uses – like the Snapdragon 855. But the fees don’t end there. Qualcomm also charges royalty fees to use its chipsets that it has already charged its partners to use. Essentially double-dipping.
Qualcomm was taken to court over this, and the Judge, Lucy Koh (who you might remember from the notorious Apple v Samsung case almost a decade ago) ruled that the Qualcomm needs to sign new patent licensing deals without the offending terms.
LG isn’t doing anything wrong here, it is simply asking Qualcomm to abide by Judge Koh’s ruling. But Qualcomm thinks that it doesn’t have too, until it has appealed the verdict.
Obviously LG isn’t a big player in the smartphone space right now, it isn’t even in the top five. So it only has so much leverage over Qualcomm. But once other smartphone makers have its contracts up for renewal in the very near future, we could see Qualcomm start to budge. While it likely won’t budge for LG, if it were Samsung or even Xiaomi, it would definitely budge.
Samsung, as well as Xiaomi, are Qualcomm’s biggest customers. If Qualcomm does not budge for them, they could simply go elsewhere for a chipset. After all, Samsung does make its own chipsets, and even manufacturers Qualcomm’s Snapdragon 800-series chips. So losing Samsung would be a pretty big deal for Qualcomm. Xiaomi doesn’t have as many choices, but it could move over to MediaTek (which it does use in some very inexpensive smartphones) or over to Samsung’s Exynos chipsets.
The bigger deal for LG here is that, if this battle isn’t resolved soon, it could be forced to delay the V50 ThinQ 5G, and any other 5G smartphones it may have in the pipeline. While it has already started selling the V50 ThinQ 5G, it is possible that it won’t be able to manufacture any more of them until this issue is resolved with Qualcomm. For the sake of customers, hopefully this won’t take too long.