Apple probably knew that they would face some delays with Intel, but they probably didn't expect Intel to be that incompetent with their 5G modem...Intel didn't even have a dummy prototype at MWC.
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Apple and Qualcomm Reach Settlement, Agree to Drop All Litigation
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Apple probably knew that they would face some delays with Intel, but they probably didn't expect Intel to be that incompetent with their 5G modem...Intel didn't even have a dummy prototype at MWC.
There's a very good reason for Apple to drop their case - they got their royalty rates changed to a single per-chip fee instead of the stupid "percentage of device cost plus some extra fees added on top double-dipping" that Qualcomm was asking for.
Erricsson charges $5 per multimode handset for SEP patents with zero chip technology.
The cost for Qualcomm is
2.275% for a single mode handset SEP - 4% complete portfolio including software
3.25% for a multimode handset SEP - 5% complete portfolio including software
The percentage is capped at a device cost of $500.
The premise of the cost is not necessarily silly.
Apple is still paying that way. They have a six year license and a multiyear silicon/chip agreement.
The structure of percentage allows low cost phones in emerging markets to have lower licensing fees vs expensive smart phones in developed countries. Developed markets subsidize emerging markets. You may not like it, but that doesn't necessarily make it silly.
So since Ericsson charges for SEP and never sells you a chip, but Qualcomm sells a chip also; you think Qualcomm should roll silicon cost and licensing together? Okay.
You can have the chip at $12+a percentage of the cost of the device. Now it's all rolled together but the price didn't change. SEP does not require a company to sell chips. It also doesn't force a company to do anything but license their technology in a fair and non discriminatory manner.
Both Ericsson and Qualcomm charge the license on the finished device.
This is the only way to make sure that the licensee is paying correctly for multimode vs. single mode fees.
Intel and others never need to license Qualcomm technology to make a modem.
The device manufacturer pays he license at the end.
You can make your own chips until the cows come home. The guy that make the phone pays the license.
If you want to buy chips they will sell you chips Qualcomm will sell them, but you need a license.
IF they roll the licensing and the chips together would that make people happy?
It won't change the cost and it's not double dipping.
The license is for the use of the patents.
The cost of a chip is the resources that went into the uniques embodiment of the patents, silicon, NRE, etc.
Apple's been working on baseband for a couple years.
In any event, I was a CPU designer for 14 years - I know what is involved in CPU design and baseband design. Baseband is not any more difficult. It's differently difficult, but not more difficult.
Get ready for ‘I just want Qualcomm model’I have a feeling that the 2019 iPhones will use both Qualcomm and Intel chips, like they did with the iPhone 7's. The 2020 iPhones on the other hand might be all Qualcomm...let's hope!
Haha, yep! The forums will be flooded with that question, when really it has been answered over and over again...buy the Verizon model outright! At least that was how it was in the past. Obviously could be different this year.
Anyone who has the XR/XS/XS Max has Intel modems, and I have an iPhone XS and I see zero difference in real world use.
These were done in a lab, but it even says that in real world testing the difference between Intel and Qualcomm in negligible, and some of it comes down to software:
https://9to5mac.com/2018/10/01/iphone-xs-lte-performance-tests/
Do you have proof of this? If you do it just backs up the fact this is nothing more then Apples MO even more.
And the stupid ‘percentage of device’ is what Apple agreed to in contract with its legal signature on it!!.. No double dipping.
Do you have proof Apple gave in? Why no, you don’t.
What I have PROOF of is that 5 courts have decided Qualcomm’s licensing practices were illegal. The FTC case is being decided right now. And Apple sued Qualcomm over their licensing practices. It’s not a stretch at all to think this case would have ended up like all the others - with Qualcomm losing.
Or Apple gave in because Intel was years away from mass producing 5G modems, and ended up abandoning mobile chips altogether.
Just my opinion, but Intel probably abandoned making 5G chips once this announcement between Apple & Qualcomm was made. Seems like the timing of Intel's announcement was right on, but it just could have been coincidence.
This isn't a case of Apple winning in court means Qualcomm walks away (like a spoiled child) and never deals with them again. This isn't how businesses operate. People think lawsuits are a personal thing - they're not. It's just a way for companies to resolve differences after negotiations fail.
Look at all the lawsuits between Apple and Samsung. Did Samsung turn their back on Apple and refuse to sell them OLED screens? Hell no, they want those billions of dollars in revenue.
Qualcomm would have happily sold modems to Apple even if Apple won their court case. Just like Samsung continued to sell components to Apple during and after their numerous court cases.
Because of this Apple was never in any position of having to worry about getting 5G modems. If Intel couldn't provide them they'd just buy them from Qualcomm.
Apple likely to win? Based on...? The $1B judgement against essentially validated the contract that Apple instructed its product manufacturers not to pay. That same contract said Apple and its ODMs agreed to pay the terms. Establishing the validity of the contract meant Apple was going to get to pay up.
I don't see it was the slam dunk you claim it was. Agreed the impact of loss was bigger to Qualcomm than Apple. And with a jury?... Who knows how that'll play out. (But it is Apple that's been charging those jurors by hundreds more over the last few years while whining about mean Qualcomm wanting $7.50 per phone. I can predict what my response would have been....
And does that mean? because there's no real confirmation or any details of something like that.
And Intel has been in this business for 50 years for example.
Yeah, tell that to chipzilla, I mean Intel.
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Well if Intel was going to deliver a 5G modem when they promised and a contract was signed with Apple there would be no reason to give up the development of a mobile 5G modem.Just my opinion, but Intel probably abandoned making 5G chips once this announcement between Apple & Qualcomm was made. Seems like the timing of Intel's announcement was right on, but it just could have been coincidence.
Apple would just split between Intel and Qualcomm modems like they did in the past or use Intel 5G modems lower tier smartphones or tablets.
This sudden decision makes it clear that Intel's 5G modem for smartphone wasn't performing well at all.
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Those kind decisions aren't made in a few hours. My guess is Intel was asked to wait until the settlement was made public before announcing the end of its smartphone modems business.
As Intel stated modems weren't really profitable to them, and they know Apple is going to have its own silicon in a few years, so it didn't make sense to invest huge money just to have a single customer for a limited amount of time, no matter how big it is. I'm sure Apple can negotiate good prices, so Intel wasn't going to make a lot of money from this business.
I think Apple was confident Intel would build a decent 5G modem and they still have a good relationship with them so they waited to settle with Qualcomm, but Intel faced some unexpected issues and the 2020 deadline was hard to met. At that point Apple was forced to look for alternatives, the best one being Qualcomm, and they went for it.
Maybe Apple just told Intel you know what? Either you give us a modem in 2020 or we're done with you and Intel said ok, we can't make it, go find another supplier.
That's precisely the kind of reason why Apple wants to build its own modem, like the custom CPU and GPU. They still need somebody to build the actual chip like TSMC for their CPU, but at least they can plan the roadmap in advance.
We've covered most of this ground before, so I won't go through it all. But to address a couple of things:
(1) Ericsson doesn't get $5 per multimode handset. Yes, there are published rates which often get referred to. But those rates don't reflect what companies actually get - often they are far from what companies actually get. This has been studied. We can't say with precision, but the total royalty costs as a portion of smartphone sales is something like 3 or 4%. Of that, Qualcomm - thanks in part to its illegal and contract-violative tactics (according to numerous regulatory bodies and industry participants) - accounts for (or as recently as 2016 accounted for) more than half of the total royalties collected.
Ericsson reports financial information. That information doesn't specify its (actual) royalty rates. But from that information we can make ballpark determinations for what it collects from smartphone licensing - or, at least, for the upper limit of what's possible. In 2018 it collected less than $1 billion from IP licensing.
(2) Intel and others may not need to license Qualcomm technology because Qualcomm effectively agrees not to sue them. But they have wanted to license Qualcomm technology and Qualcomm's contractual commitments require it to license SEPs to them. So says, e.g., the KFTC, Judge Koh and a plain reading of TIA and ATIS policies. Qualcomm, of course, hasn't wanted to grant Intel and other modem makers licenses to its SEPs because doing so would have eroded its ability to collect royalties for those SEPs on a per-device basis.
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The $1 billion payment (which Apple claimed it was due) was from a different agreement, not from the licensing contracts which the contract manufacturers have with Qualcomm. (And, to be clear, there wasn't a $1 billion judgment. There was a summary judgment that Qualcomm wasn't entitled to a declaration that it was freed, based on Apple's behavior, from having to make that payment. A finding that it had to pay Apple, and a determination of how much it had to pay, would have likely come later.) The court's decision relating to that payment doesn't speak to the validity of the contract manufacturers' agreements with Qualcomm. Also, the agreement which that payment was required by is no longer in effect. It expired a couple of years ago.
You're right in that, with a jury, you're always taking a chance - regardless of how sound your case is legally. But Apple had mostly succeeded (through pre-trial motions and arguments) in getting the case, as presented to the jury, to be about more than contract interpretation and enforcement. Qualcomm had wanted to narrow the scope of the considerations in this case. Apple had wanted to expand them. Qualcomm succeeded in some regards, but on the whole Apple got more of what it wanted. This case, as framed when it went to trial, was going to be about more than just interpreting existing contracts.
Apple had no reason to fold, in fact the settlement announcement caught intel completely off guard. Had intel known, the exiting 5g press release Would have promptly rolled out with Apples settlement press release. The reason the intel press release was so vague was because they had to quickly put something together last minute and release it before the market had time to speculate and react.
This happened earlier this week, before the settlement.
Apple got Qualcomm's German fake patent injunction lifted: appeals court deemed it likely flawed
http://www.fosspatents.com/2019/04/prior-to-settlement-apple-got-qualcomms.html
Apple was winning
Qualcomm on the other hand needed the trial to end quickly, very quickly
Apple-Qualcomm settlement doesn't end FTC antitrust claims
https://news.yahoo.com/qualcomm-ftc...sn91OGIdF6Eu7og0z1fuSwN5a0EKhKH7AEqIOxc_CtEWc
Qualcomm couldn’t afford to take a chance of something coming out during the apple trial that could affect the FTC antiruat lawsuit against them.
The only question is what did Qualcomm offer apple to make them drop their lawsuit.
Interesting take. I did actually read all of it, just quoting the part I want to question though.
What if Apple's lawyers, through discovery, saw that Qualcomm had smoking gun proof that Apple shared trade secrets with one of Qualcomm's competitors (*cough* Intel *cough*)?
One, That has nothing to do with this trial.
This trial was about Qualcomm’s business practices, double dipping, or charging customer twice. That’s why the FTC is sued Qualcomm, the same exact reason apple is suing them.
Two, if intel really did steal trade secrets they wouldn’t have exited mobile 5g modem development.
Qualcomm just didn’t have any leverage against apple.
This is one of the reasons apple is so important to Qualcomm more than half of all high end phones sold are iPhone, and remember Qualcomm charges apple on rrp which are quite high for iPhones.
As well, most premium android phones use other soc and modems such a Exynos and Kirin. Only 15%-20% of Samsung’s premium Galaxy s and galaxy note line combined are made by Qualcomm
Once again Qualcomm never had any leverage against apple. Apple looks to have had Qualcomm over a barrel and the FTC over their shoulder watching their day in court. Have you read the opening statements?
Qualcomm did have some leverage against Apple. We shouldn't think otherwise. (Though Qualcomm had just lost a tiny piece of leverage it previously had based on a ruling in Germany.) But Apple likely had more leverage than Qualcomm did. That's what most indications point to. I won't even try to go through them all. But, e.g., the pre-trial rulings in the the SD of CA case on the whole favored Apple. That trial set up more how Apple wanted it to than how Qualcomm wanted it to. And the respective stock reactions, to the news that a deal had been reached, point to a market which thought that Qualcomm needed to get a deal done far more than Apple did.
That said, what you refer to wasn't likely the case. Qualcomm had tried to get that issue before the jury. But Judge Curiel ruled last month that Qualcomm wouldn't be allowed to present evidence or argument relating to that allegation.
There is a VERY strong possibility that patent licensing goes back to court form Qualcomm competitors on fair licensing still.
One major global competitor for chips is Broadcom and if they start making 5G módem chips, they have great experience with LTE, Wi-Fi and Bluetooth chips, all they need is to pay the required necessary licensing if they use the same methods patented. Sure this doesn’t mean Qualcomm is dead statement nor thinking on my part but it could hurt them financially if:
Broadcom produces efficient and better 5G+LTE chips or 5G+LTE+BT+Wi-Fi all-in-one chips at competitive pricing with Foxconn, Samsung and other assemblies and shows up in say Apple, Samsung, Oppo and Huawei/OnePlus phones and that’s a HUGE market dominance which can significantly lower Qualcomm’s revenues and profits. Theirs alway patents pending from 6G development.
What I’m saying is there are other major players than can hurt Qualcomm while still paying patent fees. This case maybe over between Apple & Qualcomm but it can reoccur between different plaintiffs.
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Intel abandoned 5G modem chips for smartphones, focusing on laptops only. Not entirely abandoned.
(sorry for the delay, haven't been on here since)
Superficially it's just implementing a spec, but in practice it's more difficult to get competitive performance in real-world conditions. There are a lot more environmental factors when it comes to baseband chips, and you can't have the compiler patch things up for you.
As for acquiring Intel's baseband division, IMO the most likely other buyer would be ARM. Their parent company, Softbank, is absolutely rolling in cash, and an ARM-like licensing model for baseband chips would be extremely disruptive to the status quo.