Apple dispute starts to hit Qualcomm's bottom line
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.