Patent lawsuit turns up heat on Apple

Customers look at Apple's new iPhone 8 Plus after it goes on sale at an Apple Store in Shanghai. [Photo/Agencies]

Qualcomm Inc's decision to file a patent lawsuit against Apple Inc in China is putting pressure on the US smartphone maker as it faces mounting competition from local rivals, analysts said on Monday.

The move came at a critical point when Apple's 10th anniversary iPhone is set to compete head-to-head with Mate 10, the artificial-intelligence-enabled handset unveiled by Huawei Technologies Co Ltd on Monday in Germany.

Jia Mo, an analyst at global consultancy Canalys, said: "Qualcomm taking the initiative to challenge Apple in the world's largest smartphone market shows that the chip giant is no longer willing to compromise its intellectual property income."

Qualcomm said on Friday that it has filed a lawsuit in a Beijing intellectual property court, seeking to halt the manufacturing and sale of Apple's iPhones in China, where most iPhones are produced.

"It will take a very, very long time for the Chinese court to reach a ruling. But given Qualcomm's aggressive stance, it seems to have very solid evidence to safeguard its interest," Jia said.

The latest move is part of a broad and prolonged legal dispute that centers on Qualcomm's technology licensing business. Qualcomm generates most of its profits from charging fees for patents that cover the fundamentals of all modern phone systems. But Apple accused it of overcharging unnecessary fees.

The lawsuit also came as Apple is to start selling its most advanced handset iPhone X on Nov 3. Customs officials in Zhengzhou, capital of Henan province, where major iPhone plants are located, said over 46,500 iPhone X had been shipped out of local factories on Saturday, heading to the Netherlands and the United Arab Emirates.

On Monday, its arch rival Huawei unveiled the Mate 10, which boasts a slate of upgraded AI features such as faster image recognition capabilities.

Xiang Ligang, a smartphone expert and CEO of telecom industry website Cctime, said: "Though it is unlikely for iPhones to be banned in China, the lawsuit distracts Apple's attention when it is working hard to revive local consumers' appetite for iPhones."

Apple's iPhone 8 has so far been greeted with less enthusiasm in China, as most fans are waiting for a better-equipped iPhone X, analysts said.