Welcome to the latest edition of the Qualcomm vs Apple saga.
Ever since Qualcomm was sued by Apple over excessive licencing fees and accused of being a monopoly, the company essentially went on a big war with Apple. The company first took down Apple’s older iPhone devices in Germany, and it’s even tried to get the company’s newest iPhones banned in China, a market where Apple’s new iPhones are already struggling.
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And now, we have some new tidbits on the Apple vs Qualcomm fight. Apple’s Chief Operating Officer, Jeff Williams, testified in court on Monday, revealing some interesting details. Williams claimed that Apple originally wanted to use Qualcomm’s 4G LTE chips on its new iPhones, and Qualcomm refused to supply the chips, forcing Apple to use Intel’s slower 4G LTE chips instead.
The company previously used both Intel’s and Qualcomm’s 4G LTE chips on some older iPhone devices like the iPhone 7, though it mostly relied on Qualcomm for older devices. That deal obviously went down as soon as Apple started complaining about Qualcomm’s unfair licensing fees. “We were working toward doing that with Qualcomm, but in the end they would not support us or sell us chips,” Williams said.
Williams also revealed that Apple pays $7.50 per iPhone for Qualcomm’s tech, which is apparently too high, according to CNET.
Apple’s war against Qualcomm could lead to the company’s iPhones falling behind in the smartphone market. Apple’s main competitors like Samsung and other Android manufacturers are believed to be releasing phones with Qualcomm’s 5G modems later this year. And if Qualcomm continues to refuse to work with Apple, the company would have no other option than to use Intel’s 5G chips, which doesn’t come out till 2020.
At the end of the day, that may not matter too much for Apple. The company’s phones have never really been cutting-edge and that hasn’t affected the popularity of Apple’s iPhone brand.
As for Qualcomm, things are going to be challenging. The company is currently in trial, and its monopolistic practices aren’t really looking too good for the lawsuit. Only time will tell how this proceeds. Remember, Apple is suing Qualcomm for a whopping $1 billion, so there’s a lot at stake here.
<p><br></p><ol><li>This isn't from an Apple vs. Qualcomm lawsuit it is the US Federal Trade Commission vs. Qualcomm. The U.S. government is suing Qualcomm for anticompetitive business practices. </li><li>Apple isn't paying $7.50 per phone it was paying $37.50 per phone. 30 dollars for the component and 7.50 is the licensing fee. </li></ol><p><br></p><p>Both of these points are mentioned in the CNET article you linked to in the article. You might want to go back and re-read it. </p>
<blockquote><em><a href="#396927">In reply to provision l-3:</a></em></blockquote><p>For a $1000 phone that's less than 4% both for the license and the chip. Sounds pretty reasonable to me.</p>
<blockquote><em><a href="#396952">In reply to skane2600:</a></em></blockquote><p>I'm in no way qualified to offer an opinion on what reasonable component pricing and licensing fees would be for a smartphone or anything else for that matter which is why my comment didn't weigh on the matter. I simply pointed out two glaring factual errors in the article. </p>
<blockquote><em><a href="#396960">In reply to provision l-3:</a></em></blockquote><p>Fair enough.</p>
<blockquote><em><a href="#396977">In reply to skane2600:</a></em></blockquote><p>Component procurement aside, if you are interested in the actual FTC vs. Qualcomm case I'd suggest reading the FOSS Patents blog. He has been doing a daily recap of what is happening in court. He feels the FTC backed by Samsung, Intel, Apple, Huawei and a host of others have put together a fairly strong anticompetitive case against Qualcomm. That said, the FTC is just wrapping up their side and Qualcomm has yet to offer its defense so the strength of the case against them could very well fall apart. It's all interesting to say the least. </p>
<blockquote><em><a href="#396955">In reply to AnOldAmigaUser:</a></em></blockquote><p>I'm not sure where you are going with this. You are reiterating the pricing I broke out in my comment. </p><p><br></p><p>My point isn't about what Apple should or shouldn't be paying or how that price is derived. I was pointing out that the article had factual errors. </p><p><br></p><p><br></p><p><br></p><p><br></p>
<blockquote><em><a href="#397202">In reply to AnOldAmigaUser:</a></em></blockquote><p>Again, my point is that reporting is incorrect. Let's look at what Mehdei wrote again; "<span style="background-color: rgb(255, 255, 255);">Apple pays $7.50 per iPhone for Qualcomm’s tech"</span></p><p><br></p><p><span style="background-color: rgb(255, 255, 255);">That is ambiguous at best as it doesn't say what the 7.50 is for and the implication is that it is all Apple is paying which is factually incorrect. That is the point I made. </span></p><p><br></p><p><span style="background-color: rgb(255, 255, 255);">As for the lawsuit itself, you are partially correct. This testimony was from the lawsuit that the FTC brought against Qualcomm not Apple. The FTC is suing for anticompetitive behavior with licensing being one piece of that. In the FTC suit the issues are: </span></p><p><br></p><ol><li>Withholding chips unless customers paid their preferred prices for SEP licenses and charging elevated royalties for third party chips.</li><li>Refusing to license SEP to competitors in violations of their FRAND commitments. </li><li>Entering into an exclusive dealings with Apple, a "particularly important cellphone manufacturer.</li><li>There is a fourth count but it is redacted. </li></ol><p><br></p><p>The third point is the only part of the FTC case that involves Apple and it is not about pricing but rather entering into an exclusive agreement. Granted Mehdei offers no context for the testimony nor does he provide the full testimony. He also misidentifies the case as being Apple vs. Qualcomm. So it is completely understandable why people are confused on this one. </p><p><br></p><p> The other two points in the case involve other companies including Samsung, Lenovo, Intel, Huawei, LG and a host of others. </p><p><br></p><p>If you think I got any of that wrong, here is the FTC case filing. Please point to the relevant part and I'll happy correct anything I missed:</p><p><br></p><p>www. ftc. gov/system/files/documents/cases/170117qualcomm_redacted_complaint.pdf</p><p><br></p><p>Apple has a lawsuit about pricing that was filed after the FTC field it's suit and that is about pricing but the testimony mentioned in this article is not from that. </p>
<blockquote><em><a href="#396950">In reply to JG1170:</a></em></blockquote><p>as long apple fans love to be milked from their beloved company, apple will never change</p>
<p>payback time for apple … with apple style</p>
<p>It is January of 2019 and the definition of “5G” has still not been clearly defined. It is a marketing buzz word at this point. Real 5G coverage is probably 3-5 years away. </p><p><br></p><p> I have read that Apple is busy making their own modems and in the future will not use Qualcomm or Intel, like they have done with their own ARM chips. </p>
<blockquote><em><a href="#397032">In reply to Skolvikings:</a></em></blockquote><p>Apple are Developing a modem chip. (due in 12-18 months). It’s one of the reasons Qualcomm are being so aggressive, as they hold patents that have had a stranglehold on USA region, it why Samsung have to use Qualcomm chips on USA handset sales, and why Samsung use their own chips in other regions. </p><p><br></p><p>Qualcomm are also desperately trying to give intel a death blow on the modern chip front too via their Apple lawsuits. If they can successfully prove Apple passed Qualcomm IP to intel then they (Qualcomm) can pretty much stop intel having any 5g modem chip business at all. This coupled with their move into ARM PC chip supply is why they’re being “ all billy big pants” at the moment. If Qualcomm are successful they win a fortune in sales/fees etc, if they lose then it’s going to hurt a lot. </p><p><br></p><p>All these companies are exceedingly greedy and aggressive, as are google, amazon and of course intel and Apple. The global reccssion and credit squeeze that’s occurring pretty much everywhere now and to all brands in one way or another will take some impressive scalps. Watch those companies who don’t have enough cash in the bank…..</p><p><br></p><p>Qualcomm last time I looked had some 22 billion dollars of debt ( it doubled in about a year), and about 40 billion in cash and short term investments. So they can cover themselves, but debts growing. If they lose their effective USA patent modem chip grip then they’re in trouble with a capital T….. so they don’t want Apple developing and using their own modem chip, at all, at any costs, as for that to happen would likely mean they had lost their IP grip on the region. </p>
<blockquote><em><a href="#397037">In reply to Waethorn:</a></em></blockquote><p>they'll introduce it in next next iphone, to sell the best iphone evaaaaaaaaaaaa … starting from only 1999$</p>
<blockquote><em><a href="#397037">In reply to Waethorn:</a></em></blockquote><p>Isn't Apple rumored to be working on this? I would imagine that one of the issues with moving forward with doing this is that it doesn't resolve the licensing fee issue which is the sticking point at the moment. </p>