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Did Apple Leak Qualcomm IP Modem Data To Intel?

It’s shaping up as one of the biggest technology battles this decade, Apple Vs Qualcomm and the outcome could have a profound output on the future of the iPhone.

On Friday a US Court room in San Jose, heard Apple executive Jeff Williams start to tell a story involving license fees but what unfolded went on to be a lot deeper and was compelling testimony of what goes behind Apple’s closed doors.

The testimony was presented in the Federal Trade Commission’s antitrust case against Qualcomm.

The FTC argues that Qualcomm won’t sell chips if customers don’t also pay hefty licensing fees.

What was revealed was an email exchange between Williams and Qualcomm Chief Executive Officer Steve Mollenkopf that revealed that the relationship and billions of dollars’ worth of sales between the two mobile phone giants may have actually collapsed over a squabble about software access and the potential leaking of IP information.

During testimony in the FTC case Williams said Qualcomm refused to supply Apple with modems after it sued the semiconductor company. He said he contacted Mollenkopf by email and phone to try to persuade Qualcomm to supply chips for 2018 iPhone models.

“We tried to get them to sell us chips, and they would not,’’ he told Judge Lucy Koh who’s presiding over the bench trial in San Jose. This is the same judge who spent four years presiding over the Samsung Vs Apple case.

Williams at the time said that Apple would not leak key Qualcomm computer code needed to customize modem chips which are now being produced by Intel.

Today Intel is the sole provider of iPhone modems, which are crucial chips that help phones convert radio signals into data and voice.

Qualcomm then sued Apple, accusing it of using its software to help improve the performance of Intel chips.

The chief operating officer offered to “firewall” engineers using the software. He wrote in an email “I just hope the licensing dispute doesn’t cloud good judgment in the team on a massive business opportunity,”. He said in an email to Qualcomm that Apple planned to order about $2 billion worth of chips from Qualcomm for 2018. “I was hoping to keep some decent quantity of business flowing with hopes that the licensing stuff will get solved.”

“In my wildest imagination of some evil intention of Apple, I have trouble coming up with a real scenario where anything of significant value could be leaked based on this code,” Williams wrote in September 2017.

Bloomberg said that in a bid to keep Qualcomm supplying modems for a portion of Apple’s 2018 iPhones, Williams dismissed the licensing dispute to focus on the potential benefits of the two companies continuing to work together.

Mollenkopf replied that his main concern was about protecting Qualcomm’s proprietary information and that he hadn’t seen much action by Apple in response to earlier complaints from Qualcomm on that issue. “This is independent of our license dispute,” the CEO wrote.

Nonetheless, Mollenkopf offered to provide the software access Apple needed. In return, he asked for a commitment from Apple to use Qualcomm modem chips in at least 50 percent of iPhones over two years, according to the emails.

The exchange suggests that Qualcomm and Apple were arguing over software, rather than the licenses at the centre of their bruising legal battle.

Williams said in court this week that he spoke with Mollenkopf about the chip supply issue over the phone. The details of that conversation aren’t known.

On Friday in court, the FTC confronted Qualcomm Chief Technology Officer James Thompson with a 2014 email exchange between him and Mollenkopf in which the CTO suggests “striking back at Apple while we’re strong” amid licensing negotiations.

Thompson viewed Apple as vulnerable to losing big business in North America and China, at the time, if it continued pushing back against Qualcomm’s no-license-no-chips policy, according to the email cited by the FTC. An Apple spokesman didn’t respond to a request for comment. Qualcomm declined to comment.

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