Qualcomm on Wednesday announced a fresh lawsuit in its legal squabble with Apple, this time targeting the contract manufacturers who make the iPhone. The suit, filed in federal court in California, accuses Foxconn, Wistron, Pegatron and Compel of breaching their licensing contracts with Qualcomm.
The argument: Apple contends that Qualcomm's royalty fees for its standards-essential patents are unreasonable, in particular because they are based on the total price of the phone. Qualcomm, meanwhile, stands by its royalty structure.
Why it matters: It's a high-stakes legal battle for both companies. Although Apple uses its own processor for the iPhone, it relies on Qualcomm for modem chips in order for its phones to run on Sprint and Verizon's network. Apple, meanwhile, is one of Qualcomm's biggest licensing customers thanks to the high price and strong sales of the iPhone.