LG: We do not expect supply chain disruption if Qualcomm agreement isn’t met
Update: June 13, 2019 at 11:28 a.m. ET: An LG spokesperson has reached out to Android Authority to clarify the situation. According to LG, the company does not expect there to be a disruption in the supply of 5G chips from Qualcomm. In fact, whether or not there is an agreement in place by June 30 “has no bearing on the supply agreement.”
Original article: June 12, 2019 at 4:36 a.m. ET: Sales of LG’s V50 ThinQ 5G smartphone are reportedly in doubt after negotiations to renew a chip licensing deal with Qualcomm fell through.
According to Reuters, the South Korean firm has completed a court filing in the U.S. opposing Qualcomm’s bid to set aside a landmark antitrust ruling against the chip designer.
“If Qualcomm does not participate in negotiations with LGE in accordance with the court’s order, LGE will have no option but to conclude license and chipset supply agreements once again on Qualcomm’s terms,” read an excerpt of the filing, according to the newswire.
Last month’s antitrust ruling found that Qualcomm had charged “onerous” fees to companies wanting to use its patents. Judge Lucy Koh also ruled that the U.S. firm needs to sign new patent licensing deals without the offending terms.
LG is calling on Qualcomm to abide by this ruling, while the Qualcomm seemingly thinks that it’s still the status quo for now until it’s exhausted its options to appeal the verdict.
It’s unclear when this impasse will come to an end, but LG is certainly in a bad position. If the court battle isn’t resolved soon, then the South Korean manufacturer will be forced to delay the LG V50 ThinQ and potentially other 5G-related devices too. It isn’t clear if the deal relates to 5G technology only or 4G devices as well, but an analyst told Reuters that LG’s mobile business could suffer “catastrophic” damage if a deal isn’t reached. This suggests that LG’s 4G devices, which forms the bulk of its smartphone shipments, are also affected by the legal battle.
This battle could also be a sign of things to come if Qualcomm’s deals with other manufacturers are up for renewal soon. It’s one thing for LG duke it out with Qualcomm, but it’s another matter entirely if other players decide to challenge the chipmaker in accordance with the antitrust ruling.