Openin Ope nin g Statement Aprr i l 16, 2019 Ap Case No. 3:17-cv-0108-GP 3:17-cv-0108-GPC-MDD C-MDD (S.D. Cal.) Cal.)
Apple Breached BCPA Section 4
JTX007 at ’6633 ’6633
In August 2017, 2017, Foxc Foxconn onn Admitted Admitted Its SULA Is Valid Valid
DTX10662 DTX106 62 at ’8296 ’8296
DTX10688 DTX106 88 at ’8675 ’8675
Apple Made the CMs Stop Paying Paying
Apple Cont Contro rols ls What What the the CMs Sa Sayy and Do
DTX0119 DTX0 1193 3 at 4
DTX01194 DTX011 94 at 4
DTX01195 DTX011 95 at 4
DTX0258 DTX0 2588 8 at 4
“(f) [CM] does not settle any such claim or allegation, or make any admissions of liability or admissions relevant to the claim or allegation (related to the Goods), or take any other acti action on that that [CM] [CM] know knows s or shou should ld reas reason onab ably ly know know will will harm harm Appl Apple’ e’s s posi positi tion on(s (s)) with with resp respec ectt to the the clai claim m or alle allega gati tion on,, with withou outt Appl Apple’ e’s s prio priorr writ writte ten n perm permis issi sion on.” .”
Apple’s Goal
DTX09321 at ’6741
Apple App le Wants To To “Devalue “Devalue SEPs”
DTX09313 at ’1936
Apple Was “Creating Evidence” for This Lawsuit DTX09352 at 28 DTX09352 at ’7502
DTX09352 at ’7483
DTX09352 at ’7484
What Apple Apple Says About Nokia’ Nokia’ss Patents
DTX00431 at ’0559
What Apple Says Says About InterDigit InterDigital’ al’ss Pa Patents tents
What Apple Appl e Says About Qualcomm’ Qualcomm’ss Patents
DTX09324 at ’9885
Apple Wanted To “Hurt Qualcomm Financially”
DTX09321 at ’6742
Apple Needed Wistron’s Support To Stop Royalty Roy alty Pa Payments yments to Qualcomm
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“[Apple] needs [Wistron's] support to stop license fee payment upon [receiving] notification from Apple. . . . [Wistron] will be facing below con consequences by any mobile ile technology Lice icensor (mainly Qualcom comm) if we sto stop paym ayment upon [Apple's] notific ifica ation: . . . Bre Breach the agre greement we had with [Qualcomm] which may result in agreement termination. . . . If [Wistron] refuses to pay the royalties due, [Qualcomm] will enforce the license agreement in . . . court . . . and we may have to pay all of the royalties due plus . . . interest[], and the legal fees . . . .”
Apple Knew Its Plan Plan Was Tortious Tortious Interference
DTX09321 at ’6746
Apple Switched to Intel I ntel To To Exert “Commercial “Co mmercial Pressure”
DTX09317 at ’1876
Apple Waited To To Sue Qualcomm Until the BCP BC PA and TA Expired Expi red
DTX09317 at ’1884
Timeline of CMs’ SULAs February 10, 2000 Compal ompal Signed Signed
2000
2002
October 18, 2005 Foxconn Signed
2005
2006
May 23, 2007 Wistron istron Signed Signed
2007
2008
2007 Ap Apple rele relea ases first iPhone
Ap ririll 29, 2010 Pegatron Pegatron Signed Signed 2009
2010
2011
2012
2014
2011 Ap Apple firs firstt uses Qualcomm chips in its iPhones
Compal SULA, First Chip Purchase from Qualcomm, and Market Power Allegations February 10, 2000
Compal Signed SULA
2000
2002
2004
2012
2002 Compal first buys Qualcomm chips
2017
“Premium LTE”: 2012-2017
Alleged Market Power CDMA: 2004-2017
Apple Admitted Qualcomm Has the “Strongest Patent Portfolio”
DTX00431 DTX004 31 at ’0559 ’0559
DTX00431 DTX004 31 at ’0564 ’0564
Cellular LTE “Unleash[es] the Power” of the iPhone
April 26, 2016
“[T]he LTE rollout with India just really began this year, and so we’ll begin to see some really good networks coming on in India. That will unleash the power and capability of the iPhone in a way that an older network, a 2.5G or even some 3G networks, would not do.” - Tim Cook, Chief Executive Officer, Officer, Apple, Inc., DTX01 DTX01146 at 12
Apple Says Qualcomm Is the Best
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DTX00088 DTX000 88 ’485 ’4854 4
Average Modem Chip Price by Standard
Mobile Device Downlink and Uplink Speeds
Total Annual Mobile Data Traffic
The Cost of Data Is Decreasing $50
Price per GB of Cellular Data in U.S. $47
$45 $40
$37 $3 7
$35 $29
$30
$25 $2 5
$25 $20
$15 $1 5
$15
$10 $1 0
$10
$7
$6
$5 $0 2010
2011
2012
2013
2014
2015
2016
2017
iPhone Net Sales Since FY 2011 $180 $180 billion
$167B $155B
$160 $160 billion
$137B
$140 $140 billion
$141B
$120 $120 billion
$102B $100 $100 billion
$91B $79B
$80 $80 billion $60 $60 billion
$46B
$40 billion $40 $20 billion $20 0 2011
2012
2013
2014
2015
2016
2017
2018
iPhone “Ecosystem” Revenue for FY 2017 iPhone Sales
Services (estimated allocation to iPhone)
iPhone Accessories (estimated allocation to iPhone)
$141 b i l l i o n
$20 b i l l i o n
$1 bill billion ion
iPhone Revenue vs. Royalty Revenue $180 $180 billion
Apple’s iPhone Net Sales During Fiscal Year $160 $160 billion $140 $140 billion $120 $120 billion $100 $100 billion
2017 - Appl Apple e stops stops paying for Qualcomm’s royalties
$80 $80 billion $60 $60 billion $40 $40 billion $20 $20 billion
Qualcomm Royalties on Apple Devices 1
$0 $0 2011
2012
2013
2014
2015
2016
2017
2018
Apple Dwarfs Qualcomm (FY 2017) Apple total cash vs. Qualcomm total cash
Apple net sales vs. Qualcomm net sales
Apple net income vs. Qualcomm net income
$48 b i l l i o n
$2 b i l l i o n
$269 b i l l i o n
$399 billion $3 billi on
$229 b i l l i o n
$22 b i l l i o n
Apple Locked in Chip Supply Before Before Striking
***
DTX09317 at ’1884
Apple Ensured that Qualcomm’ Qua lcomm’ss Supply Commitment Commitm ent Applies Even if the CMs Sto Stoppe pped d Paying Paying
JTX009 at ’3668
