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Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

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Raimond Spekking via Wikimedia Commons

Qualcomm acknowledged Wednesday that some of Apple's suppliers have started to withhold royalty payments amid its legal dispute between the iPhone maker. Qualcomm said it is widening its earnings guidance for the current quarter amid uncertainty over how much the suppliers will pay next quarter.

For now, Qualcomm says its revenue wasn't hit as the suppliers withheld the same amount — around $1 billion — that Qualcomm has chosen not to pay Apple, for which Apple has also sued. However, Qualcomm said it isn't clear how much, if at all, Apple suppliers will underpay this quarter.

Why it matters: Even as the two companies are locked in a bitter legal battle, they both still depend on one another. Apple is one of Qualcomm's largest customers, while Apple relies on Qualcomm exclusively for the modem chips used in iPhones for Sprint and Verizon.

Investors unfazed: In after-hours trading, Qualcomm shares were trading up nearly 3 percent, to $54.10.

Here's what Qualcomm had to say in the guidance that accompanied its earnings report:

Apple's contract manufacturers reported, but underpaid, royalties in Q2'FY17. However, our revenues were not negatively impacted as the contract manufacturers acknowledged the amounts are due and the underpayment was equal to the amounts that Qualcomm has not paid Apple under our Cooperation Agreement (that expired Dec 31, 2016) that are currently in dispute.It is unclear whether Apple's contract manufacturers will underpay royalties owed under their contracts with us in Q3'FY17. Our guidance range for fiscal Q3 EPS is wider than our typical practice primarily due to this uncertainty. We have considered a variety of scenarios within this range, but have not included a scenario where no payment is made by the contract manufacturers.

Go deeper

House passes $1.9 trillion COVID relief package

Photo: Screenshot via C-SPAN

The House approved President Biden's $1.9 trillion COVID relief package on a 219-212 vote early Saturday morning, sending it to the Senate for a possible rewrite before it gets to Biden's desk.

The big picture: The vote was a critical first step for the package, which includes $1,400 cash payments for many Americans, a national vaccination program, ramped-up COVID testing and contact tracing, state and local funding and money to help schools reopen.

8 hours ago - Health

Biden says it's "not the time to relax" after touring vaccination site

President Biden speaking after visiting a FEMA Covid-19 vaccination facility in Houston on Feb. 26. Photo: Mandel Ngan/AFP via Getty Images

President Biden said Friday that "it's not the time to relax" coronavirus mitigation efforts and warned that the number of cases and hospitalizations could rise again as new variants of the virus emerge.

Why it matters: Biden, who made the remarks after touring a vaccination site in Houston, echoed CDC director Rochelle Walensky, who said earlier on Friday that while the U.S. has seen a recent drop in cases and hospitalizations, "these declines follow the highest peak we have experienced in the pandemic."

Updated 8 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Most COVID-19 survivors can weather risk of reinfection, study says — "Twindemic" averted as flu reports plummet amid coronavirus crisis
  2. Vaccine: FDA advisory panel endorses J&J COVID vaccine for emergency use — About 20% of U.S. adults have received first vaccine dose, White House says — New data reignites the debate over coronavirus vaccine strategy.
  3. Economy: What's really going on with the labor market.
  4. Local: All adult Minnesotans will likely be eligible for COVID-19 vaccine by summer — Another wealthy Florida community receives special access to COVID-19 vaccine.
  5. Sports: Poll weighs impact of athlete vaccination.

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