One of the more pressing questions during Apple’s earning call earlier this afternoon centered on the company’s current litigation battle with Qualcomm. Toni Sacconaghi of Bernstein pressed Tim Cook for comments on Apple’s decision to sue Qualcomm, bringing up a past instance of Cook saying that he hated litigation:
“I’ve always hated litigation, and I continue to hate it, and I highly prefer to settle versus battle.”
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In response to Sacconaghi’s question, Cook explained that he still very much feels the same way about litigation. “I don’t like litigation and view it as a last resort,” he stated. With the Qualcomm lawsuit, Cook stated that Apple did not see another way forward without legal action.
According to Cook, Qualcomm was essentially hindering Apple’s plans to innovate by requesting increased royalties for technology it had nothing to do with, while additionally withholding a billion dollars in payments it owed Apple.
They were insisting on charging royalties for technologies that they had nothing to do with, and so we were in a situation where the more we innovated with unique features like Touch ID, or advanced displays, or cameras, the more money Qualcomm would collect for no reason, and the more expensive it would be for us to innovate.
Cook likened the actions of Qualcomm to the idea of buying a sofa and charging a different price depending on the price of the house it went into:
It’s somewhat like buying a sofa and you charge a different price depending upon the price of the house that it goes into. From our point of view, this doesn’t make sense, and we don’t believe it will pass muster in the courts.
As for the future, Cook reiterated that he doesn’t like litigation and that if another option presents itself, “that would be great.” Ultimately, however, Cook doesn’t expect Qualcomm to prevail in the courts, but he expects a lengthy legal battle.
I don’t like litigation, and so if there’s another way, then that would be great, but at this point I don’t see it. I fully expect at this point in time that it will take some time, but in the end, I think common sense will prevail, and the courts will see it for what it is. So that’s the way I see it.