San Diego, Calif.-based semiconductor and telecommunications equipment provider Qualcomm Inc. (QCOM) saw its shares sink about 4.6% Thursday morning at $54.18 after posting weak profit results in the most recent quarter. (See also: AMD vs. Qualcomm: Who Dominates VR?)

Although the chipmaker posted top- and bottom-line numbers above the consensus, investors are disappointed in profit down a whopping 40% from last quarter, marking the first time in years that the company did not include patent royalties on devices from Apple Inc. (AAPL) as it navigates its ongoing legal dispute with the Cupertino, Calif.-based smartphone maker.

Patent Profits Wither

On Wednesday, Qualcomm reported profit of $865 million on revenue down 11% year-over-year (YOY) to $5.37 billion for the three months ended June 25. While management highlighted strong chip sales for smartphones and other devices, revenue in its patent-licensing division, where the firm earns a majority of its pre-tax profit, took a major hit. Patent-licensing in the most recent quarter fell 42% over last year to $1.17 billion.

The results indicate just how detrimental a legal tussle with tech titan Apple can be to those in its massive ecosystem. As a result of the dispute, in which Apple says Qualcomm unfairly extracted exorbitant royalties, the chipmaker has lost an estimated $10 in royalties per iPhone after licensing payments from the iPad and iPhone were blocked.

The news comes as a group of leading smartphone manufacturers, including Compal Electronics Inc., Foxconn Technology Group, Pegatron Corp. and Wistron Corp, have joined the smartphone maker in challenging Qualcomm’s licensing practices. The group of Apple suppliers filed a lawsuit against Qualcomm late Tuesday night in a U.S. federal district court in San Diego. (See also: Why Qualcomm May Have to Pay $45 Billion for NXP.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.