Qualcomm vs. Apple Impact in Perspective

By Paul Ausick Updated Jan 11, 1:18PM EST · Published Dec 24, 7:53AM EST

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Qualcomm vs. Apple Impact in Perspective — © courtesy of Apple Inc.

By Gene Munster and Will Thompson of Loup Ventures

[On Friday], Apple indicated that they will stop selling iPhone 7 and 8 in Germany due to an injunction issued as part of a long battle between Apple and Qualcomm. As of now, both iPhone 7 and 8 are still available for sale in Germany. There is a lot more at play here than what meets the eye, including Qualcomm’s high-stakes bet that these iPhone injunctions will not be successfully appealed.

Impact on Apple Is Insignificant

Most important to note, the impact to Apple’s business from the Germany injunction would be insignificant. Based on rough math, we believe the injunction would affect about 0.2% of Apple’s revenue.

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We estimate Germany represents ~4% of Apple’s business.
iPhone represents ~60% of total revenue.
iPhone 7 and 8 combine for ~41% of iPhone revenue.
Further, the injunction only bans sales in Apple retail stores, so the devices are still available through carriers and resellers which we think represent ~80% of iPhone sales. Putting it all together, the Germany injunction affects 0.2%, or an insignificant amount, of Apple’s revenue.

Qualcomm also won a similar injunction in China that affects more models (iPhones 6s through X), but the scope of the ban is much narrower, as an update to iOS 12 will void Qualcomm’s claims. As of now, all iPhone models are available in China.

Our Bottom Line: We don’t think either of these injunctions will have a measurable impact on Apple, but it may be over a year before we know what the ultimate impact will be, as the litigious battle between these companies has been ongoing.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.